Bank of Queensland to raise $400m in share sale

Brisbane-based lender is selling shares to help fund the $440m it will pay for Investec’s Australian financing and leasing businesses

Bank of Queensland is seeking to raise $400 million in a share sale to pay for the acquisition of Investec Bank Australia’s specialist financing and leasing businesses.

The Brisbane-based has lender agreed to pay a total consideration of $440m for Investec’s asset finance, leasing and deposit book, including the estimated capitalistion of the businesses of $230m.

Ciaran Whelan, chief executive of Investec Australia, told Data Room the company will get $210m through the sale in the form of a goodwill payment.

Investec’s professional finance business provides finance to about 19,000 customers, mainly to medical, dental and veterinary practices. It has $2.2 billion in total loans. The asset finance and leasing business has about 14,000 customers and $173m in loans. Bank of Queensland is also acquiring $2.7bn in deposits.

Bank of Queensland plans to sell $190m worth of shares to fund managers and $201m worth of shares to individual shares at $10.75 each, a 12.6 per cent discount to the stock’s closing price yesterday of $12.30.

Goldman Sachs is the sole underwriter of the share sale, a Bank of Queensland spokesman told Data Room. Gilbert Tobin is the law firm advising and preparing documentation for Bank of Queensland on the stock sale. 

The share sale to fund managers opened today at 9am (AEST) and closes at 2pm Monday, April 14. The sale to individual investors opens on Thursday, April 17 at 9 am and closes on Friday, May 9 at 5pm.

(Reporting by Brett.Cole@businessspectator.com.au)