Forum Archive Index - June 2001

["G Stolwyk" <stolwyk@wave.co.nz>]

 

BCH has moved up lately and is now $ NZ 12.60.

 

DAD is $ A 6.45  or $ NZ 8.11 ( 0.795 ).

 

Both prices seem to be moving in tandem and I have prepared a merger scenario:

 

1. Statistics ( NZ $ )

                                             DAD          BCH     MERGED

Shares ( mill )                         101             86           187#

 

Pred. profit to 30/6/01($ mill)    14.4          18.8          33.3

 

E/S ( cents)                           14.5           21.9          17.8

 

Share price ( $ )                      8.11          12.60        10.17

 

P/E                                        55.9          57.6          56.7

 

Market cap. ( $ mill )       819(43.1%)  1083(56.9%)   1902

 

# I estimated the total number of options to be converted prior to the merger as 2.8 mill.and the new shares have been included.

It is not known how these options are going to be treated. The effect is not too material for our calculations. There are very small rounding errors throughout this report but these won't affect the overall results.

 

Notes: BCH already owns about 10% of DAD. DAD's earnings have been improving but are not as consistent than those of BCH.

 

2. The merged Entity.  

The new capital base of the merged Entity can be decided on and the ratios of entitlements calculated.

 

If the merged entity will have 187 mill. shares, then DAD's shareholders could receive 81 mill shares on the basis of 0.8 share for each one, they hold now.

 

And BCH shareholders could receive 106 mill. shares in the new entity on the basis of 1.25 shares for each one held at present: Actual calculations vary slighly. 

 

The statistics of the merged Entity are shown above: See table of item 1.

 

3. Other.

The merged Entity will need to define the dividend pay-out policy.

It is not known where the new HO will be located and in which currency, the dividend will be paid.

Westpac has a dual structure in this regard. We just have to wait for these matters to be resolved.

 

The indexing ot the merged Entity in Australia will be an important issue as well and could affect the share price. 

 

Gerry

Holds BCH