Planner falls into CBA net

$373 million acquisition of Count Financial, one of the biggest networks of financial planners.

The offer, which has been endorsed by Count's board, comes on the heels of the Gillard government this week detailing the first round of reforms under its Future of Financial Advice package.

The changes, which seek to scrap commission-based payments and increase regulation, are already driving consolidation among smaller planners.

The friendly deal will see Count founder and executive chairman Barry Lambert and his wife Joy emerge with a $127.5 million windfall from selling their substantial stake in the stock exchange-listed business to the bank.

The acquisition is also likely to be a key test for new Australian Competition and Consumer Commission boss Rod Sims.

It marks the first major deal by a bank since the competition watchdog blocked National Australia Bank's $13.3 billion move on wealth manager AXA Asia Pacific.

The transaction, if it proceeds, is expected to increase CBA's adviser numbers to more than 1850 from 1220 at present. This would rank it second behind AMP by total number of advisers. AMP's takeover of AXA Asia Pacific last year saw it emerge with 4000 aligned planners.

The transaction will also deliver to the bank Count's near 18 per cent stake in the country's biggest finance broking network, Mortgage Choice. Count also has a stake of about 8 per cent in another advisory firm, DKN Holdings.

Count ranks as the Australia's largest franchise network of independent financial planners. The

mid-sized firm's focus has been to train accountants to sell financial products, giving it more than $14 billion in client funds and loans under advice.

Under the deal, CBA will pay $1.40 in cash for each Count share, representing a 64 per cent premium for Count's average trading price over the past three months. The takeover will be by way of a scheme of arrangement.

Count shares yesterday shot up 36? to close at $1.42.

At $373 million, the offer represents a valuation multiple of 14.6 times Count's most recent annual net profit of $25.6 million.

Mr Lambert and other board members have unanimously recommended that Count shareholders vote in favour of the offer, in the absence of a superior proposal emerging.

The recommendation is subject to an independent expert concluding that the offer is in the best interests of Count shareholders.

CBA is being advised by Goldman Sachs while Count is being advised by JPMorgan.