Heartland bank to pitch to shareholders in November

The proposed merger of Marac Finance with Canterbury Building Society and Southern Cross Building Society will need to get approval from shareholders, bondholders and depositors to get over the line.

Tuesday, 24 August 2010

The chairman of Marac's listed parent, Pyne Gould, Bruce Irvine told his shareholders in a letter that the three financiers had extensive due diligence underway, and will look to put a pitch to investors in November.

The merged entity will be held in an NZX-listed holding company, which existing PGC, CBS and SCBS shareholders will own. The operating group will be a building society made up of three financial institutions.

The merger would create a lender with $2.2 billion of assets and accomplish Marac's goal of becoming a registered bank. Marac's aspiration was dented last year when its credit rating was downgraded to a speculative BB+, below the Reserve Bank's minimum investment grade rating.

Former ASB executive James Mitchell was appointed project manager to evaluate the proposal three weeks ago, and will lead the integration of the three firms if the bid goes ahead.

PGC's shares rose 2.4% to 43 cents in trading in Tuesday.

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