Bendigo & Adelaide Bank Ltd. (BEN), an Australian regional lender, agreed to buy Rural Finance Corp. of Victoria in a transaction that will net the state government A$400 million ($370 million).
The purchase includes all Rural Finance’s assets and its loan book, which is valued at around A$1.7 billion, Bendigo & Adelaide said in an e-mailed statement today. The bank will raise A$230 million through a fully underwritten share placement to institutional investors to partly fund the transaction, it said.
Together with Bendigo & Adelaide’s existing Rural Bank, the purchase will allow the lender to reach 5,200 farmers in Victoria state with a loan book of more than A$2.4 billion, the bank said. The state government said it will use the proceeds to invest in infrastructure such as the Murray Basin rail project.
Bendigo & Adelaide said it will pay A$1.78 billion for the transaction, which includes the business’s book value of A$153 million and A$85 million for goodwill, according to Will Rayner, an Adelaide-based spokesman for the lender.
The bank, which will also use retail deposits and excess liquidity for the acquisition, will maintain Rural Finance’s brand and presence in 11 locations around Victoria state, it said.
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