Takeover of St. George Bank by Westpac Banking

St. George Bank Ltd. (STGKY) of Australia agreed to the takeover proposal of Westpac Banking Corp.(WBK) today.This is the biggest banking takeover in Australia.

St.George is the fifth largest bank in Australia. Its ADR trades in the OTC market with ticker STGKY. Today the stock closed at $50.30. Westpac is paying US $ 14.4B for St.Geroge. Under the terms of the deal, “St. George’s shareholders will receive an additional special dividend of 28 Australian cents per share (23 U.S. cents), worth A$160 million ($133 million) in total. Westpac is offering 1.31 of its shares for every St. George share.

On August 11th, St.George posted a 12.5% rise in profits in the first 10 months of its financial year and reaffirmed profit numbers for the next year.

Overall this friendly takeover by Westpac is good for St.George’s shareholders. In the long run Westpac will benefit from this takeover as well. It may be a good time to pick up some Westpac shares which trades in New York with ticker WBK.

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