Australia | Feb 20 2007
By Rudi Filapek-Vandyck
It is ANZ Bank’s (ANZ) intention to strengthen its wealth management operations with the addition of online brokerage and wholesale service provider E*trade Australia (ETR), but is the bank trying to achieve this ‘el cheapo’?
Yesterday, ANZ and the E*trade board announced a recommended offer of $4.05 per share for all the shares (65.8%) ANZ doesn’t yet own in E*trade Australia. However, the fact that Etrade shares have been consistently trading above this price level ever since the announcement is probably an indication of how the market feels about the offer.
Deutsche Bank analysts formulated it as follows in a research report on the matter this morning: “charming but opportunistic”. Deutsche Bank believes ANZ is banking on maximising the company’s operational leverage within the banking organisation while leaving nothing on the table for E*trade shareholders.
On top of this comes a still favourable outlook for equities markets, the analysts argue.
Deutsche Bank pushed up its price target for the stock to $4.44, arguing ANZ’s offer would not be high enough to achieve the key requirement of at least 90% of shareholders accepting the bid.
Financial service provider Invest4Profit.com.au is with Deutsche Bank in that ANZ’s offer should be higher – much, much higher. In a statement emailed out to clients this morning, CEO Paul Nojin argues a takeover price of somewhere in the vicinity of $6 would be more appropriate.
Nojin claims that clients of his service already represent more than 10% of E*trade shares, which would put them into the position to possibly make or break the deal.
We tried to contact Nojin today but have not been successful thus far.