bendigo adelaide bank merger

While I am sure there will be more ups and downs in the overall market it would appear the worst is over in the US financial markets.

The Bendigo Bank / Adelaide Bank merger therefore is looking much better than it was a short time ago

Adelaide Bank had been under a cloud, (incorrectly in fact)for having an exposure to the US sub prime market.

It does NOT.

However perception is everything, and both BEN & ADB have gone down substantially from the prices immediately after their announcement to merge.

From here on it is probable that both BEN and ADB will trend back towards those higher prices

Despite some of the financial scribes canning the idea, I believe the merger will be a very good fit
They operate in different areas of the financial markets, so will not share the same customers, which would have been no advantage.
Their computer systems/technology is the same, making the logistics the merger a lot more simple than what has occured previously when other banks have merged with different systems and this has been a nightmare.
There will be substantial economies of scale.

And the merged entity will imo be a more attractive target for some other financial institution once it has occured.
(Maybe St George, maybe Robabank ? )

But even without any potential suitor, the new merged entity should continue the excellent growth that both BEN and ADB have enjoyed in the last few years.


The terms of the merger are ADB shareholders get 1.075 BEN shares for each ADB share.

So for those interested, based on their respective current prices, the cheapest way into the merged entity is to buy ADB.

DYOR

Cheers,

Bendigo

I hold shares in both ADB & BEN