ANZ Banking Group and Suncorp Group are working together to pull...

ANZ Banking Group and Suncorp Group are working together to pull off the biggest Australian banking deal in more than a decade.

It is understood ANZ and Suncorp were locked in late-stage talks on the weekend, trying to finalise a deal that would see ANZ acquire Queensland-based Suncorp’s bank.
The deal, involving a big cash offer from ANZ, could be signed and announced as early as Monday, according to sources involved in the talks.

ANZ would be expected to tap equity markets help fund the acquisition, in what would be its first equity raising since its infamous share placement in 2015.
Fund manager sources told this column Macquarie Capital and UBS’ equity capital markets teams at started preparing an equity raising for about $3.5 billion which was slated to launch as early as Monday.

The late-stage talks come after Street Talk revealed on Friday night that Suncorp had tapped ANZ for a round of negotiations, working with the Melbourne-based lender exclusively.
ANZ has Tony Burgess’ Flagstaff Partners in its corner for advice while Suncorp has Barrenjoey Capital Partners assessing options for the bank as part of a strategic review.
Spokespeople for ANZ and Suncorp declined to comment.
Analysts value Suncorp’s bank at about $5 billion. ANZ would be expected to pay a premium to acquire it.
Should the pair agree a deal it would be the biggest ownership shake-up in Australian banking since the financial crisis. In 2008, Westpac Banking Corp bought St George and Commonwealth Bank of Australia acquired Bankwest, while much of the M&A activity has involved big four banks offloading their wealth management and insurance operations.
It is understood Suncorp and ANZ have already signed a process deed, setting out a period of exclusive due diligence and access to each other’s management teams, in a sign of their commitment to the mooted transaction.

Talks have progressed substantially since, sources said, to the point where they were close to finalising the deal’s price and terms.
Both companies’ boards were expected to meet on the weekend.
Sources said ANZ was keen to add Suncorp’s big retail business into its existing network, while Suncorp’s assessing options to divest its bank and focus solely on general insurance.
MYOB deal on backburner

It comes as the Shayne Elliott-led bank is also in late-stage negotiations to acquire accounting software group MYOB, as Street Talk revealed in June. Those talks are understood to have taken a back seat for a couple of weeks, as ANZ’s board instead chases Suncorp’s bank.
Buying Suncorp would instantly add about $60 billion of customer loans to ANZ’s balance sheet, 80 per cent of which would be mortgages, at a time when it’s talking about rebuilding its Australian retail and commercial bank and trying to use technology to bolster its customer proposition.
Suncorp has offloaded its life insurance, wealth and smash repairs arms. Divesting Suncorp bank would leave it as Australia’s second-largest general insurer, behind Insurance Australia Group, and end its long-held “bancassurer” structure.