Nedcor and BoE have been given the go-ahead to merge by Finance Minister Trevor Manuel.
A statement from Nedcor on Tuesday said the shareholders of BoE, who have the final say in the transaction, should receive their circulars setting out the full details of Nedcor’s friendly bid early in June.
Manuel has notified the Registrar of Banks of his approval of the proposed Nedcor-BoE transaction.
”The minister has confirmed that the transaction is in the public interest and therefore is subject only to the jurisdiction of the Banks Act,” Nedcor said.
The merging of the businesses of Nedcor and BoE will create South Africa’s largest bank in terms of domestic banking assets and will bring greater stability to the banking industry.
Nedcor and BoE also issued a joint market announcement on Tuesday, in terms of a Securities Regulation Panel requirement, illustrating the pro forma financial effects of the proposed transaction.
The pro forma figures show that had the transaction occurred at the end of last year — Nedcor’s financial year-end — Nedcor’s headline earnings would have been 10,6% higher and net asset value 4,5% higher.
The pro forma figures show that BoE shareholders are being offered a premium of 12,2% on their net asset value per share.
Nedcor chief executive Richard Laubscher said: ”We’re delighted that the Minister of Finance has given his approval to merging the businesses of BoE and Nedcor. BoE offers an excellent strategic fit for Nedcor in all business areas”.
BoE chief executive Tom Boardman said: ”There is no doubt that virtually every part of BoE can benefit from becoming a part of a larger group and we are pleased that the process is on track”.
The next step in the bid process is an application to the High Court, expected this week, to approve the circular to BoE shareholders which contains full details of the Nedcor offer and all the salient dates.
Once approved, the circular will be posted to shareholders. BoE’s board of directors recommends that BoE shareholders vote in favour of the Nedcor offer.
Directors who hold BoE shares intend to vote their shares in favour of the transaction.
Nedcor is offering R290 cash plus 0,48544 Nedcor shares for every 100 BoE ordinary shares. ? Sapa