Bendigo to Buy Adelaide Bank in Share Swap Deal

Australian regional lender Bendigo Bank said it plans to acquire rival regional lender Adelaide Bank in an all scrip deal valued at around A$1.9 billion (US$1.6 billion), the two companies said in a statement on Thursday.

Under the terms of the merger proposal, Adelaide Bank shareholders would get 1.075 Bendigo Bank shares for every Adelaide Bank share.

The directors of Bendigo Bank have unanimously recommended the proposal, while Adelaide Bank directors have supported the deal in the absence of a superior proposal.

"The merger will bring together specialist skills in wholesale and retail banking that have been separately developed. The merged group will retain and continue to grow both brands," Bendigo Bank Chairman Robert Johanson said in a statement.

Earlier this year, Bendigo Bank rejected a takeover proposal from Bank of Queensland citing concerns over potential integration issues.

Based on the share swap, Bendigo is valuing Adelaide Bank shares at A$17.73 each, a 23% premium over Adelaide's last traded price.

The merged group -- to be known as Bendigo and Adelaide Bank -- would have A$43 billion in loans and a market value of A$4 billion. With more than 4,000 staff and 380 branches, the merged company would become a key player in Australia's competitive banking industry.

The deal is subject to approval by Adelaide Bank shareholders and a vote is expected to be held in November. Adelaide Bank is being advised by ABN AMRO, while Grant Samuel and Goldman Sachs JBWere are the financial advisers to Bendigo Bank.

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