The Bank of Queensland Limited (ASX:BOQ) share price will be halted until late next week as it prepares for the potential acquisition of ME Bank
The post Bank of Queensland (ASX:BOQ) shares halted ahead of potential $1.3bn ME Bank acquisition appeared first on The Motley Fool Australia. –
The Bank of Queensland Limited (ASX: BOQ) share price won’t be going anywhere on Friday.
After the market close on Thursday, the regional bank requested two back to back trading halts for up to four trading days.
This means the Bank of Queensland share price is likely to be out of action until Thursday 25 February.
Why is the Bank of Queensland share price in a trading halt?
Bank of Queensland requested a trading halt this afternoon so that it can consider, plan and execute a proposed equity capital raising.
According to the request, this equity capital raising comprises an accelerated non-renounceable pro-rata entitlement offer and a placement to institutional investors. It is being undertaken to fund a potential acquisition.
What is the potential acquisition?
According to the AFR, Bank of Queensland is on the cusp of acquiring ME Bank for $1.325 billion.
The report claims that the regional bank was selected for a final round of exclusive talks and is expected to sign a formal sale agreement in the next few days.
In order to fund the all-cash acquisition, the news outlet understands the bank will look to raise over $1 billion from shareholders. It is expected to pitch the acquisition to shareholders as a major strategic move and earnings accretive purchase.
Macquarie Capital is understood to be running the auction, with ME Bank’s owners, industry superannuation funds including AustralianSuper and Cbus, keen to sell the Melbourne-based bank.
The report also claims that fellow banks Australia and New Zealand Banking GrpLtd (ASX: ANZ) and Bendigo and Adelaide Bank Ltd (ASX: BEN) were previously in the running to acquire ME Bank before being pipped at the post by Bank of Queensland.
With the Bank of Queensland share price generating a total return of just 1.4% per annum over the last five years, shareholders will no doubt be hoping that this acquisition leads to better returns over the next five years.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.