Bank Of Queensland Limited · ASX:BOQ
Bank Of Queensland — Merger or Acquisition (August 2007)
14 slides from Bank Of Queensland's merger presentation, Aug 31, 2007
Slide 1: Proposal to merge Bank of Queensland and Home Building Society
Proposal to merge Bank of Queensland and Home Building Society Investor Presentation 31st August 2007 1
Slide 2: Agenda
Agenda Strategic Rationale Details of the Proposal Benefits to Home and BOQ Shareholders Benefits to Other Stakeholders The Enlarged Entity Highlights of Integration and Synergies 2
Slide 3: Strategic rationale for a merger
Strategic rationale for a merger 9 Creation of a regional banking powerhouse centred on the two strongest growing State economies in Australia with more than 270 branches 9 Greater exposure to Western Australia, the fastest growing State in the country. The merged BOQ-Home entity will have 35 branch
Slide 4: Details of the proposal
Details of the proposal Scrip and cash Exchange ratio of 0.844 BOQ shares AND $2.80 in cash per Home share proposal Total implied value of the offer of $18.20 per Home share1 Implied 29% premium to Home’s closing share price of $14.11 on 30 August 2007 premium and c.18.0x FY2008 cash PER mul
Slide 5: Benefits to Home shareholders
Benefits to Home shareholders 9 Strong premium relative to Home’s recent share price performance 9 Value creation for Home shareholders through the opportunity to own c.20% of the merged BOQ-Home entity and participate in the future growth of Australia’s fastest growing bank 9 Benefit from the futur
Slide 6: Benefits to current BOQ shareholders
Benefits to current BOQ shareholders 9 Significantly enhanced presence in Western Australia, the fastest growing State in Australia 9 Expected to be cash earnings per share accretive on a normalised basis in FY2009 9 Access to synergies generated from the merger 9 Creation of a regional banking powe
Slide 7: Benefits to other stakeholders
Benefits to other stakeholders Customers 9 Access to a wider product offering and a more complete customer service, particularly in SME and business lending 9 Access to an enhanced branch network of a total of more than 270 branches throughout Australia with more branches to be opened in WA followin
Slide 8: Premium to Home's recent share price performance
Premium to Home’s recent share price performance Home’s historical share price1 Premium relative to historical prices Offer consideration per share of $18.20 based on The Offer represents a 29% premium2 to Home’s BOQ’s closing share price of $18.25 on 30 August closing share price of $14.11 as at 30
Slide 9: Attractiveness of BOQ scrip
Attractiveness of BOQ scrip BOQ share price performance1 BOQ total shareholder return2 20.00 30% Total shareholder return (% p.a.) 28% 18.00 28% Share price ($) 16.00 26% 25% 14.00 24% 23% 12.00 22% 10.00 20% Aug 05 Dec 05 Apr 06 Aug 06 Dec 06 Apr 07 5 year TSR 3 year TSR 1 year TSR BOQ S&P/ASX 200
Slide 10: Expected impact on EPS and capital
Expected impact on EPS and capital Marginally EPS dilutive for BOQ shareholders in FY2008 EPS accretive in FY2009, c.2%1 Over 5%2 EPS accretive in FY2010 The enlarged BOQ will maintain capital targets of 7% - 8% of risk weighted assets as Tier 1 capital 1. Based on FY2009 normalised cash NPA
Slide 11: The merged BOQ-Home entity will be a regional banking powerhouse
The merged BOQ-Home entity will be a regional banking powerhouse Merged BOQ-Home BOQ Mackay Home business - Pro forma Market capitalisation ($bn)1 2.1 0.05 0.5 2.6 Customers (#) 530,000 21,000 126,000 677,000 2007 cash NPAT ($m) 98.03 1.8 20.2 120.0 before synergies2 Pre-tax synergies ($m)4 - - - c.
Slide 12: History of successful integration
History of successful integration The merged entity will maintain dual BOQ and Home brands in WA for up to 18 months to assess best market branding going forward 9 Successfully merged with Pioneer Building Society over recent months. Integration is expected to be completed in November 2007 Exist
Slide 13: Synergies
Synergies Pre-tax cost synergies of c.$3m, c.$10m and c.$20m are expected in years 1 to 3 respectively Synergies are expected to be generated from: - Conversion of Home branches to BOQ’s OMB branches - Migration onto common IT platforms - Funding benefits - Consolidation of back office functions
Slide 14: Summary
Summary The merger between BOQ and Home will create a regional banking powerhouse anchored in the two fastest-growing States in Australia BOQ’s Board and management are enthusiastic about the combination of the BOQ and Home businesses The proposal will provide significant benefits to sharehold
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