ANZ 1.64% $18.54 australia and new zealand banking group limited

anz cool on kiwi bank bid

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    ANZ cool on Kiwi bank bid
    By Tim Boreham
    September 25, 2003
    NEW Zealand's Commerce Commission is today expected to clear the way for the ANZ Bank to take over the National Bank of New Zealand.

    But despite being the only known genuine bidder, the ANZ is playing it cool on whether it really wants to embark on its biggest ever acquisition.

    There is also a widening gulf between what the ANZ is willing to pay and what NBNZ's parent, the UK Bank Lloyds TSB, is willing to accept.

    Lloyds is hoping for $6.5 billion, but "potential buyers are looking at a number well south of this", according to a UK-sourced Goldman Sachs research note.

    NZ Commerce Commission approval is vital for any of the existing players in the NZ market, which includes the Big Four Australian banks.

    It is expected the ANZ's proposal will be deemed as acceptable because it is the smallest bank in the market with a 14 per cent share.

    Merging with the NBNZ would increase this to 40 per cent - a hefty market share but falling short of a dominant position.

    However, sources close to the deal said the ANZ was yet to lodge a formal bid, with the bank mindful of overpaying given the lack of price tension in the bidding process.

    The ANZ is also believed to be wary of the cultural issues involved in integrating NBNZ, seen by many as a fiefdom of powerful chief executive Sir John Anderson.

    "It is an excellent bank but it is very much run as Sir John's show," said one banker. "There is a question as to how a bank run in a top-down way fits in with the way an Australian bank is run, which is a more collaborative effort by senior management."

    Westpac and the Commonwealth Bank have pulled out of the process, while the National Australia Bank was never a starter.

    "Lloyds still has to agree to sell it at a price (the ANZ) wants to buy it at," the source said.

    The ANZ is convinced it is the sole bidder, but Lloyds' representatives have referred to several other possible bidders.

    Possible buyers include HSBC - which recently bought AMP Banking's NZ loan book - and Citibank.

    The Halifax Bank of Scotland - which affirmed its interest in the region by taking 100 per cent control of BankWest - is an outside possibility.

    Unlike an Australian bank, these banks would not require NZ Commerce Commission approval because of their negligible presence in the NZ market.

    Lloyds hopes to complete an NBNZ trade sale by November, with a public float vaunted as the less preferable back-up plan.

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