Commonwealth Bank of Australia (CBA), which is run by New Zealander Ralph Norris and owns ASB, has announced a A$2.1 billion plan to buy BankWest from HBOS Plc and pay for it with a share issue to raise A$2 billion. The deal excludes BOS International, which has invested as much as NZ$3 billion in property financiers and property developments in New Zealand, leaving its future up in the air as a financially stressed HBOS is bought by LloydsTSB. CBA's share issue is seen at between A$38 and A$43 a share, which would be a discount of as much as 15% from it's closing share price, which was up 2.6% in a sharply lower market at NZ$45.15. Market observers said CBA had pounced at the right time when HBOS was weakest and had gotten a cheap deal at 0.8 times BankWest's book value. HBOS' share price fell 41% overnight on fears a government bailout would wipe out shareholders. CBA said BankWest would retain its brand and branches. CBA also said it was in discussions to buy Suncorp Metway. The full statement from CBA is here. CBA said it would have tier 1 capital of 7.6% after the deal, unchaged from before.
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