In an announcement to the ASX on Friday, National Australia Bank (ASX:NAB) reported it would be selling its 33.7 per cent stake of the US-based Great Western Bancorp (GWB) for US$430m. The offer comprises of 20m shares, or 34.6 per cent of Great Western’s outstanding common stock, at a stock price of US$21.50 per share. A secondary offer will allow the underwriters a 30-day option to purchase an additional 3m shares of GWB’s common stock. If the underwriters’ option were to be exercised in full, the deal would come to a total of 23m shares, or 39.7 per cent of all outstanding common stock. The company expects gross proceeds to be between US$430m (A$544m) and US$495m (A$627m). NAB initially offered 18m shares earlier in the week, but increased the size of the deal due to additional demand.
Great Western Bancorp’s financial performance has fallen in the last half. Chief Executive Andrew Thorburn said the deal was part of NAB’s plan to reduce its presence abroad and to focus more on domestic ventures. “We’re pleased to see the secondary offer of GWB well supported by investors. The further sell down of our stake in GWB is further progress in our strategy of focusing on our Australia and New Zealand franchise,” he said. The deal was expected after the company announced it would sell 100 per cent of its ownership over time on 29 August 2014. Shares of NAB are down .5c, or .01 per cent, at $36.77 per share around 11:24pm on Friday. Shares of the company have advanced 5.96 per cent in the last 12 months and 9.45 per cent so far this year.
Author: Simon Herrmann
May 01, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.