St George recommends Westpac bid

Monday, 08 September 2008

St George Bank has recommended a sweetened takeover offer from Westpac in what would be Australia's biggest banking takeover.

St George said today its shareholders would get a special dividend of up to A$1.25 per share. An independent expert had confirmed the bid of 1.31 Westpac shares per St George share was fair and reasonable, St George added.

There had been speculation that Westpac would have to up its price for St. George. Westpac shares have fallen 12.5 per cent so far this year, while St George shares have fallen 0.6 per cent.

"There were some expectations that there would be some improvement in the final price to be agreed upon," said Peter Vann, head of investment research at Constellation Capital Management.

"St George shareholders get a little more cash in their pocket and still get the Westpac shares. It's a pragmatic way to sweeten the bid a bit, so I am happy with that," he said, adding that the bid was likely to get through.

Westpac shares were up 4.63 per cent at 0100 GMT on the ASX, and St George shares were up 4.43 per cent, while the S&P/ASX 200 index was up 3 per cent.

"The St. George Board believes that the merger of St. George and Westpac, on the terms proposed, is a very positive outcome for St. George shareholders," John Curtis, St George's chairman said.

St George shareholders will vote on the deal on November 13.

- Reuters