Heartland bank merger crosses first hurdle

Monday 22nd November 2010 1 Comment

The proposed Pyne Gould-led merger for a South Island-based bank has crossed its first hurdle with shareholders in Southern Cross Building Society giving the nod to the deal.

Almost 99% of SCBS shareholders signed off on the deal, which will fold SCBS and Canterbury Building Society into a new entity with Pyne Gould's Marac Finance, though a quorum for depositors wasn't met.

"This is a very pleasing result and a positive endorsement of the proposal to create a New Zealand owned listed banking and financial services group through the merger between ourselves and CBS Canterbury and Marac," chairman Geoff Ricketts said in a statement.

The merger is scheduled for early February, 2011 and will see the two building societies holding 14.5% each, according to previous statements, while Marac will hold nearly three quarters.

Pyne Gould plans to distribute most of its stake in the entity if the merger is successful.

The three companies had total assets of $2.2 billion at June 30 of which $289 million was shareholders' equity. SCBS is controlled by Oceania and Eastern, a private investment vehicle for Ricketts, Robin Congreve and Chris Mace, which has 28% of the building society.

BusinessDesk.co.nz

Comments from our readers

On 22 November 2010 at 7:24 pm Victoria Beck said:

I attended a S/C depositers' meeting this afternoon, which did not make quorum requirements, so there's another in December, when numbers won't matter. It's all according to the rules, but apparently this is normal, as was indicated by there not being enough chairs available even for those who did turn up. It seemed odd that a Google piece dated August 2009 mentioned S + P had wiped the PG/Marac credit rating but in the investment statement it's said to have BB status. Given the Huljich Wealth Management fiasco, should I be worried? I wish Bruce Sheppard had given his opinion on this matter.