Marac Finance stockholders have rubber stamped the proposed merger between Marac, Southern Cross Building Society (SCBS) and CBS Canterbury, which aims to ultimately create a bank, with just CBS depositors now left to vote.
At a reconvened meeting held in Auckland, Marac secured support from 96.29% of the votes cast. It had required at least 75% support. The meeting was rescheduled for today after Marac failed to attract enough interest to secure a quorum at the initial meeting last month.
The merger plans call for Pyne Gould Corporation subsidiary Marac to merge with SCBS and CBS to create greater scale and tap a bigger retail deposit funding base, seek an investment grade credit rating from Standard & Poor's and banking licence from the Reserve Bank. The plans envisage a NZX-listed "Heartland Bank" (the combined entity is currently dubbed Building Society Holdings Limited) that would aim to double its NZ$2.2 billion asset base within five years through growing lending to families, small business and the rural sector.
The merger partners are seeking backing from seven groups - covering shareholders, members, debentureholders, bondholders and depositors from the three, plus PGC shareholders. Following the Marac stockholders vote, the partners have now secured support from six of the required seven parties with just CBS depositors left to vote on Friday.
Jeff Greenslade, Marac chief executive and managing director designate of the proposed "Heartland Bank", said the partners were now in reach of completing the merger.
"Should CBS Canterbury depositors give their approval then we are down to regulatory approvals for the merger to take effect," said Greenslade.
"It is our current expectation that should those approvals be given then the key merger conditions would be satisfied on the 16th of December following the granting of final Court orders, with the merger date expected to be completed early in the new year. Listing of Building Society Holdings Limited on the NZX is anticipated to occur on 31 January 2011.”
The merger partners hope to apply for a banking licence next July. Cameron Partners and Northington Partners' independent report on the merger proposal suggests it could take up to two years to obtain a banking licence and there is a risk ultimately that it takes even longer, although "it is likely" one will ultimately be granted.
All of Marac, SCBS and CBS are covered by the extended Crown retail deposit guarantee scheme until December 31, 2011. Should the merger be confirmed, they'll seek to enter the new entity into the extended guarantee scheme.