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The board of Brisbane-based mutual MOVE Bank has rejected a takeover bid from ASX-listed lender Auswide Bank.
Auswide offered MOVE Bank $66 million in shares, with no upfront cash payment for members included in the deal.
Had the proposal been accepted, MOVE Bank would have become the second customer-owned lender to be consolidated by Auswide, which acquired Your Credit Union (YCU) in 2016.
Speaking to Mortgage Business, MOVE Bank CEO Therese Turner slammed what she described as an “opportunistic” proposal, which undervalued the mutual.
“Importantly, our members would have funded that purchase price by transferring MOVE Bank’s net equity to Auswide,” she said.
“This means that Auswide would not have financially contributed to the transaction – and Auswide shareholders would have been the prime beneficiaries.
“Our members have chosen to bank with a mutual because of our values and mutuality, with a focus on people helping people.”
She added: “Our advantage over a profit-driven bank, like Auswide, is that our profits go back into improved products and services – not to shareholders.”
Auswide’s managing director and CEO, Martin Barrett, was critical of MOVE’s handling of the proposal, which he said should have been communicated to members.
Drawing on the bank’s acquisition of YCU, Mr Barrett told Mortgage Business that if MOVE Bank members had been informed of the proposal, they would have been “overwhelmingly in favour”.
“The proposal outlined the merits for members along the lines of YCU,” he said.
“It sought engagement with the MOVE Bank board to work with Auswide Bank on any of the proposal elements to help support a beneficial merger.
“The MOVE board rejected the proposal and advised no interest in engaging to discuss the particular elements of the proposal.”
He added: “It is disappointing that the MOVE board has chosen not to engage.”
The chief executive added that the proposal was part of a broader strategy to strengthen Auswide’s market position.
“Auswide Bank has a strategy of growing its business both organically and via sensible mergers,” he said.
“It has long had interest in other ADIs where our physical distribution, range of products and services, and well-regarded customer service would complement another’s and bring material benefit to members.”
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