Proposed acquisition of IWL by Commonwealth Bank of Australia
1 August 2007
IWL Limited ("IWL") and the Commonwealth Bank of Australia ("CBA") today announced they have entered into a Scheme Implementation Deed ("Scheme Deed") whereby it is proposed that CBA will acquire all of the issued capital in IWL for approximately A$373 million or A$6.57 per share, less any dividend paid by IWL for the period ended 30 June 2007.
The acquisition is to be implemented by way of a Scheme of Arrangement under which IWL shareholders will receive the consideration wholly in cash or through CBA shares to an equivalent value ("Scheme").
The Board of Directors of IWL unanimously recommends shareholders accept and vote in favour of the Scheme in the absence of a superior offer and subject to an Independent Expert concluding that the Scheme is in the best interests of IWL shareholders. Each of the Directors of IWL will vote or cause to be voted all of their direct and indirect interests in IWL in favour of the Scheme, again in the absence of a superior offer and subject to an Independent Expert concluding that the Scheme is in the best interests of IWL shareholders.
CBA Group Executive, Premium Business Services, Mr. Stuart Grimshaw said: "IWL is an attractive acquisition for CBA and is a further important step in CBA’s broking strategy.
"The retail client base of IWL is a strong fit with the existing equities business of Commonwealth Securities Limited ("CommSec"). IWL’s excellent capability in wholesale broking delivers us access to a market segment where CommSec’s presence is underweight and where we believe we can deliver even more compelling features and service to wholesale clients".
Commenting on the agreement, IWL Chairman, Mr. Rob Bishop said: "Following significant strategic deliberations and in light of the limited, immediate opportunities to continue our own domestic consolidation strategy, the Board of IWL believes that the CBA offer is compelling and in the best interests of IWL shareholders. In the absence of a superior offer and subject to an Independent Expert concluding that the Scheme is in the best interests of IWL shareholders, the Board of IWL unanimously recommends that IWL shareholders vote in favour of the CBA offer at the Scheme meeting".
Details of the Agreement
Under the Scheme, IWL shareholders will receive as consideration for each IWL share held the amount of $6.57 in cash, less any dividend paid by IWL. IWL shareholders can elect to take the consideration wholly in cash or as CBA shares to an equivalent value. The offer represents a premium of 11.7% to the last closing price, 22.5% to the 3 month Volume Weighted Average Price ("VWAP") and 29.3% to the 6 month VWAP as at the close of trade on 31 July 2007.
The transaction is subject to a number of conditions, including IWL shareholder approval and various regulatory approvals, including ACCC. The key terms and conditions of the Scheme Deed are summarised in an attachment to this announcement.
An integral part of the offer was ensuring the support of IWL’s founder and Chief Executive Officer, Mr. Otto Buttula. Mr. Buttula has entered into an Option Deed with CBA over his 13.1% direct shareholding and related interests in IWL, the details of which will be disclosed by CBA in a substantial holder notice to be lodged with the ASX.
The cash component of the acquisition will be funded by CBA from internal resources.
A scheme booklet with full details of the transaction, including an Independent Expert’s report, is expected to be dispatched to IWL shareholders in September 2007. The shareholder meeting to approve the Scheme is expected to be held in October 2007. A more detailed timetable for the approval and implementation of the transaction will be announced in due course.
IWL’s financial adviser for the transaction is Goldman Sachs JBWere with Middletons as legal adviser. CBA’s financial adviser is Citigroup Global Markets Australia Pty Limited with Freehills as legal adviser. The Independent Expert is Lonergan Edwards & Associates.
For further information contact:
Mr. Rob Bishop
+61 3 9691 1600
Mr. Bryan Fitzgerald
Media and Issues Management
+61 2 9378 2663
Mr. Otto Buttula
Chief Executive Officer
+61 3 9691 1638