Many within Australia’s financial services industry will associate 2007 with the battle for talent.
Yet as companies scrambled to offer incentives to retain staff, another tussle was brewing on the mergers and acquisitions front.
The year’s activity kicked off in March when banking groups Bendigo Bank and its cross-country peer, Adelaide Bank, announced they were in merger talks. It would be a few months later, in August, before the pair officially announced the terms of the deal, and November before shareholders gave chief executives the nod.
In April, HFA revealed it was in talks with US fund manger Lighthouse Investment Partners. However, unlike the relative smooth sailing of the Bendigo Bank-Adelaide Bank merger, HFA’s discussions sparked the start of quite a year for the Australian hedge fund manager. Only a few months later the asset class would become entangled in the global sub-prime crisis.
April also saw a major shift on the financial planning level, with ING-owned dealer group Millennium3 eyeing South Australian group Mawsons.
The deal would be the start of much internal movement for ING Australia in 2007. Despite appearances of the deal being a coup for Mawsons, with its $7.94 million price tag, a saga ensued, involving the defection en masse of advisers. At the close of the deal only 65 of the reported 104 advisers were to call Millennium3 home.
With the door now open on financial planning deals, Melbourne-based financial services group DKN Financial put in a bid for Zurich-owned dealer Lonsdale Financial Group and its portfolio administration service, Wrap Account.
DKN’s bid was greeted with much interest as only 12 months earlier the company, under its previous name Deakin Financial Solutions, was involved in failed property group Westpoint.
Perhaps as a result of this or due to its own expansion plans, Count Financial threw its hat into the ring, providing Lonsdale with a counteroffer just days after DKN announced its intention of purchase. Count’s offer would later be dismissed, and in November the deal between Lonsdale and DKN was finalised.
In August, Commonwealth Bank of Australia (CBA) announced the year’s most intriguing deal when it put in a bid to acquire the whole of wealth management and broking company IWL.
The deal, which was finalised in October, was said to have set the CBA back $370 million.
The merger left many of the industry’s big players without a broking alternative as IWL, including Sanford Securities, was absorbed into CBA’s CommSec.
Bank of Queensland (BOQ) was another banking group to enter into talks over a possible merger. While the institution began discussions with Mackay Permanent Building Society (MPBS) in July, by November talks had broken down with MPBS withdrawing its interest in favour of a deal with Wide Bay Australia.
BOQ would recover and within a month had signed a deal with Home Building Society.
Earlier this month, ING emerged yet again to loosen its purse strings with news it would acquire dealer group Financial Services Partners (FSP).
As part of the deal, ING’s existing dealer group, Tandem Advice, would be absorbed into FSP.
While full details of the deal are unknown, the Sydney-based FSP will remain autonomous despite being swallowed by ING Australia in a $55 million-plus deal.
