Southern Cross Building Society shareholders gave the thumbs up to a merger with Canterbury Building Society (CBS Canterbury) and Marac, a subsidiary of Pyne Gould Corp Ltd, today.The vote was 98.8 percent in favour, easily meeting the 75 percent requirem
Southern Cross Building Society shareholders gave the thumbs up to a merger with Canterbury Building Society (CBS Canterbury) and Marac, a subsidiary of Pyne Gould Corp Ltd, today.
The vote was 98.8 percent in favour, easily meeting the 75 percent requirement.
"This is a very pleasing result and a positive endorsement of the proposal to create a New Zealand owned listed banking and financial services group," said chairman Geoff Ricketts.
A quorum was not present at a meeting of depositors so another meeting will be held on December 7 where the quorum threshold will be lower.
There is a special meeting of Marac stockholders and PIE fund unitholders tomorrow, a special meeting of CBS Canterbury shareholders on Wednesday, and a special meeting of Pyne Gould shareholders and a special meeting of CBS Canterbury depositors on Friday.
The merger is expected to happen on January 7. An NZX listing for the newly created financial services group is targeted for early February.
The combined business is capable of meeting Reserve Bank of New Zealand requirements to become a bank, an independent report has said.
The two building societies and finance company signed a memorandum of understanding on June 1 to build a "heartland" financial group with a national presence.
A report by Cameron Partners and Northington Partners said it is highly likely that the combined building society will achieve an improved credit rating and it may result in a cost of funding savings of between 50 basis points and 150 basis points.
"In our view, the medium-term prospects of CBS and Southern Cross on a standalone basis are particularly challenging," the report said. In the absence of a merger, other significant initiatives are likely to be required for each building society to deliver shareholders commercially reasonable rates of return.
The merged group called Building Society Holdings Ltd is targeting small business, the rural sector and "Middle New Zealand" individuals and families defined as people earning between $30,000 and $60,000, who constitute one third of the population.
It intends to adopt a customer, rather than product focused marketing approach.
The group's future will dependent on establishing a sustainable funding base, particularly following expiry of the Crown guarantee, differentiating its offering from competitors and strengthening existing positions.
