Hi Stanley,
This merger will get approval from the relavent authorities. You can bet your dividend that a nod was given before the takeover oops merger was announ. I've never seen a board move so fast to accept being ravished. All was not well with SGB, their funds were drying up faster than a Simpson Desert rain puddle. Res Bank needs a strong financial system. This merger shores up that need.
Since Tuesday last, the SP is being driven by sentiment towards another suitor or not. It falls when the mkt thinks that there is no other bid, it rises when there are thoughts/rumours of another bidder.
Its been discussed widely... the value of SGB is probably greatest to WBC with The 'gail kelly' factor . Other banks just dont have the intimate knowledge of SGB that WBC now have.
In normal circimstances a Vic based bank would be ideal to takeover the NSW based SGB. But the market does not think this will happen. A wild card will be an O/S bank that would like a ready made branch network (they are coming back into favour). But there would need to still be capital gains tax relief for holders to vote for it.
If another bid does not eventuate then the SGB sp should simply fluctuate with WBC sp. ...that 1.31 ratio will not change. SGB holders will also get 2 more divs. 87c beginning July and a final div in dec. but of course they dont get the WBC divs.
Whatever happens I dont think the Dragon will be around for too many years into the future. I'm a long time SGB holder. I feel a bit sad as I used to work for them. Unfortunately, they were thwarted in their expansion plans a few years back and that sowed the seeds for this demise.
SGB
st george bank limited
