ANZ announces major banking takeover

MELBOURNE, Australia - Australian banking giant ANZ announced Monday a Aus$4.9 billion (US$3.3 billion) deal to swallow regional lender Suncorp Bank -- one of the biggest takeovers in the sector for more than a decade.

The takeover of the Queensland-based lender would push ANZ up one spot to make it the nation's third-largest mortgage provider.

But critics warned the deal -- reportedly the largest in Australian banking since 2008 -- would cut competition and concentrate the power of Australia's big four banks, if regulators allow it to go ahead.

ANZ chief executive Shayne Elliott described it as a "cornerstone investment" and a show of confidence in Queensland.

"We know there will rightly be questions from government and regulators about the competition aspects of this transaction," Elliott said in a statement.

"As the smallest of the major banks, we believe a stronger ANZ will be able to compete more effectively in Queensland offering better outcomes for customers," he added.

Rival Queensland lender Heritage Bank's chief executive Peter Lock warned that the takeover of Suncorp Bank would "simply increase the power of the major banks in Australia".

ANZ said it planned to raise Aus$3.5 billion to pay for the deal by offering extra stock to existing shareholders. The balance would be financed with existing capital.

The bank said trading in its shares in Australia and New Zealand had been suspended until Thursday to give institutional investors time to act on its offer.

The takeover, which is subject to approval by the Australian federal treasurer and competition regulators, was expected to be wrapped up in the second half of 2023, it said.

Agence France-Presse

Hong Kong Stock Exchange unveils shock £32bn bid for London rival

LONDON - The Hong Kong Stock Exchange has bid almost £32 billion for its London rival in a shock move Wednesday to bring together 2 of the world's largest financial hubs in Asia and Europe.

The blockbuster proposal including debt, worth $40 billion or 36 billion euros, is dependent on the London Stock Exchange Group (LSEG) scrapping a proposed $27-billion takeover of US financial data provider Refinitiv.

In reaction, LSEG said it would "consider the proposal" but stressed that it "remains committed" to buying Refinitiv.

The surprise news initially sent LSEG shares surging 10 percent before it pared the gain to 5.9 percent at £72.06, far below the offer price of more than £83 per share as analysts doubted the likelihood of a deal being struck given LSEG's commitment to Refinitiv.

London's benchmark FTSE 100 index added 1.0 percent overall at the close.

"Hong Kong Exchanges and Clearing Limited (HKEX) today announces that it has made a proposal to the board of LSEG to combine the 2 companies," it said in a statement.

The cash-and-shares offer is worth £31.6 billion including £2.0 billion of debt, HKEX added.

CONNECTING EAST WITH WEST 

The Hong Kong company said a deal would create a combined group "ideally positioned to benefit from the evolving global macroeconomic landscape, connecting the established financial markets in the West with the emerging financial markets in the East, particularly in China."

HKEX chairman Laura Cha said a deal represented a "compelling" opportunity.

She added: "We believe a combination of HKEX and LSEG represents a highly compelling strategic opportunity to create a global market infrastructure group, bringing together the largest and most significant financial centres in Asia and Europe.

"Following early engagement with LSEG, we look forward to working in detail with the LSEG board to demonstrate that this transaction is in the best interests of all stakeholders, investors and both businesses."

The gigantic takeover comes just one month after the LSEG embarked upon a huge deal to acquire Refinitiv, a move that would create a market information giant to rival US titan Bloomberg.

The HKSE deal is subject to approval by both sets of shareholders, as well as the termination of the Refinitiv deal, which Charles Li, HKEX executive director, underlined was a prerequisite.

'SKEPTICISM' OVER DEAL 

"The proposed offer would be totemic in terms of East-West relations," said Richard Hunter, head of markets at online broker Interactive Investor.

But he also noted that the share price has shed half of its initial gains and remains far below the bid level.

"The proposal is a fascinating prospect but far from a done deal," Hunter said.

"The fact that the LSE share price has already retreated from the initial 10-percent spike on release of the news may reflect some initial skepticism around the likelihood of the deal going through."

The Refinitiv takeover had marked a major change of LSE strategy and comes two years after its failed £21-billion merger with Germany's Deutsche Boerse.

That gigantic deal -- the third failed attempt at a tie-up between the British and German stock exchange operators -- was blocked by the European Commission on fears it would undercut competition.

source: news.abs-cbn.com