Court approves 'heartland bank' merger

MARTA STEEMAN
Last updated 16:00 16/12/2010

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The long process to secure the merger of Marac Finance with two building societies cleared another hurdle today with the High Court granting final orders for the merger to create a $2.2 billion financial services group with aspirations to be a bank.

The court orders help pave the way for the merger to be implemented in early January.

Shares in the merged group holding company, Building Society Holdings Limited (BSHL), will be issued to on January 7  to shareholders of Ashburton's CBS Canterbury shares and Auckland's Southern Cross Building Society.

CBS Canterbury will delist from the NZAX at the end of trading today and trading in Auckland's Southern Cross shares will cease as well.

Pyne Gould Corporation, the parent of Marac, will hold the balance of shares- 72 per cent of the 300 million shares in BSHL - and intends to distribute most of them to its shareholders in the first half of next year and sell a small portion to institutions.

Listing of BSHL is expected to take place on January 31.

The managing director-designate of BSHL, Jeff Greenslade, said "Staff and boards of all three organisations have worked tirelessly to get this merger across the line.

''It has been heartening that our respective shareholders and investors have given their resounding thumbs up to our vision to create a new stronger organisation that can better service the needs of our target market - namely the banking market for SMEs, rural businesses and NZ individuals and families.''

The merger has required the green light from seven stakeholder groups. Seven meetings and voting on the merger has taken place in the past three weeks in Auckland, Christchurch and Ashburton.

"The merger brings us scale through a nationwide presence and establishes a platform for growth. It allows us to play to our regional strengths and pick the markets where we have expertise and to adopt a 'customer first' focus.

''It also improves our chances of an investment grade credit rating and to successfully gain banking registration from the Reserve Bank,'' Greenslade said.

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- BusinessDay.co.nz

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