So, let's see here.. Bank A is raising capital at 0.9x book...

So, let's see here..

Bank A is raising capital at 0.9x book value and P/E of 9.5x

...in order to acquire....

Bank B at 1.3x book value and 13.8x P/E.


(Oh, and in the process, taking on board 60bp and 110bp dilution, respectively, of Level 1 and Level 2 CET.)


Sounds to me very much like one of those takeover situations in which value gets transferred from the owners of the acquiring company to the owners of the company being acquired.

I'm guessing that, when signing off on the acquisition the ANZ board must have been thinking, "Asset growth by organic means is becoming hard, so let's just pay up to buy someone else's assets".
(I'd love to have been a fly on the board room wall when the investment banker pitches and subsequent discussions, about this doozy of a deal, took place.)

.