ASX-listed lender Auswide Bank and Queensland-based mutual lender Your Credit Union (YCU) have announced a major merger proposal.
According to a joint statement released by Auswide and YCU, the proposed merger was unanimously endorsed by the boards of both companies. Auswide Bank managing director Martin Barrett said the merger will help two smaller financial institutions provide a more compelling customer and product proposition in the fiercely competitive banking market.
“This is not a big bank takeover but a merger of two similar organisations to create an even more compelling banking proposition for our collective stakeholders,” Barrett said.
“Auswide Bank customers will now have access to a conveniently located branch in the Brisbane CBD which will also assist our growth in South East Queensland. YCU members will have access to Auswide Bank’s broad range of banking capabilities and geographic footprint.”
Under the terms of the merger proposal, each YCU member will receive $4,055 in cash and 696 Auswide Bank shares for their YCU member share via a scheme of arrangement. This brings the total proposed offer per YCU member to $7,813. The total value of the proposed offer to YCU members is approximately $32 million.
“We consider this merger with Auswide Bank to be an outstanding opportunity for YCU members. Apart from the compelling $7,813 in consideration, our members will continue to enjoy some of the best aspects of the YCU culture and service proposition,” YCU’s chairman, Gordon Rutherford said.
However, the proposal is still subject to the approval by YCU members and the approval of an independent expert concluding that the scheme is in the best interests of YCU members. The amendment of YCU’s constitution by its members is also a condition precedent to the merger due to its corporate structure. YCU members should receive relevant documentation, including the report of an independent expert, in March 2016 with the scheme implemented in May 2016.
“The Board of YCU unanimously recommends that all YCU members support the proposal, subject to an independent expert determining that the merger is in the best interests of YCU members and in the absence of a superior proposal,” Rutherford said.