IOOF (IFL) make NAB an offer for MLC
IOOF (IFL) halt
Didn’t trade today as it looks to raise around $1b to fund the acquisition of MLC – i.e. a very big bite at the cherry with the total cost around $1.44b for the advice and platform arm of NAB. The raise will be completed through an entitlement offer of 1 for 2.09 shares held and a placement which is underwritten at $3.50 a share, 22.5% below last traded. The steep discount comes given a total of 297m new shares will be issued, around 85% of the current number of shares on issue. It’s a big raise, but it is also a transformative acquisition for the company. MLC is the number 1 retail wealth manager by funds with $510b across 1,884 advisers. IOOF expects $150m of synergies by the third year, 20% EPS accretive for FY21.
The NAB deal comes as IOOF progress with the integration of the ANZ P&I business with that acquisition only completed 6 months ago. It will be a tumultuous task to combine the behemoths that are these three businesses but if done right, the outcome could be exceptional for shareholders as scale drives earnings. IFL also released their FY20 results alongside the capital raise, with underlying NPAT of $128m in line with market expectations.
IOOF (IFL) Chart
