HGH - Heartland Group Holdings

[Crackity]

I quite like this merger / acquisition

Unfortunately I don't own any HGH

Hmmm

[Plata]

Synergies and strategy mismatch aside, the equity component was well above pre announcement market price and the standalone PE ratio implied seems fair enough too. I don't really have faith in management to realise the full synergies  and integration costs will probably go overbudget (pessimistic view here) however I reckon they'll capture at least some of them. And thats all they really need to make a fair PE ratio start becoming bargain level.

Scale is the name of the game it seems in banking, just got to make sure TSB gets properly digested

[Left Field]

I bought back in yesterday.

Happy to be a HGH holder again (and new TSB holder.)

FWIW I've banked with TSB for over 20 years and found them excellent to deal with.

ps Good article on the merger here..... https://www.capitalissues.co/p/heartland-and-tsb

[Red Baron]

Scale is the name of the game it seems in banking, just got to make sure TSB gets properly digested

I vonder eef you are looking at zhis right.

Merged entity 'TSB Heartland Bank' not 'Heartland TSB Bank'
Location of head office of merged entity Taranaki, not Auckland

TSB Asset base (pre-merger): $NZ9.5b
Heartland Asset Base (pre-merger): $NZ5.6b + $A2.5b = $NZ8.5b (approx)

Zo TSB eez ze larger bank.   

Cash vinancing of deal:  $264m vendor loan provided to Heartland by Toi Foundation (TSB controlling shareholder)

Conclusion:  Reverse takeover by TSB of Heartland to gain a back door listing?

RB

[Basil]

I quite like this merger / acquisition

Unfortunately I don't own any HGH
Hmmm

I agree on paper it makes sense but a decision to buy now is one that's backing HGH management to be able to execute effectively on extracting the synergies they claim are available.  Their track record does not give me any confidence.

[Shareguy]

Can understand the scepticism when you consider that Heartland had moved to more of an online model with less branches and was exiting the residential mortgage market.

The Reserve Bank's bank financial strength dashboard shows TSB as having $6.53 billion in housing loans at March 31 and Heartland as having $4.18 billion, but most of Heartland's housing loans are reverse mortgages.

Have been going through TSB annual report and note they sell Insurance Via Tower. Can't find any breakdowns to determine value but given Marac went out of Insurance could be a great opportunity for Heartland and Tower.

The main concern I think is around the IT merger. HGH excluded this from the synergy estimates but commented they undertook a detailed review of the two banks' systems and are confident merger gains outweigh transitional costs. This can be a disaster if not done correctly.

[lorraina]

Do HGH still use Wespac's banking system.?

[Pierre]

Do HGH still use Wespac's banking system.?

Yes they do.

[Left Field]

From NBR today....

A quiet hooray for Heartland TSB

Analysis - it won't be smooth sailing but the proposed bank merger looks like a good move for all concerned.

By Tim Hunter (Paywalled)

[Shareguy]

First stage agreed


https://www.nzx.com/announcements/474380

[Arbroath]

I hear the locals in New Plymouth are dead against this "merger" but I don't think they can stop it. Toi Foundation just going through the motions - trustees are out of touch with their community...

[Greekwatchdog]

I hear the locals in New Plymouth are dead against this "merger" but I don't think they can stop it. Toi Foundation just going through the motions - trustees are out of touch with their community...

Well maybe the locals can put their money where their respective whinging mouths are and come up with a takeover offer of TSB..Or wait why don't they write to Nicola Willis and ask Kiwibank to do the same thing as HGH.

[Shareguy]

I hear the locals in New Plymouth are dead against this "merger" but I don't think they can stop it. Toi Foundation just going through the motions - trustees are out of touch with their community...

Yes a couple of local guys organising a petition and are hoping that if they can get enough people against it that HGH Will pull the pin. I heard them talking about it on the radio and at that stage last week they had 2000 signatures against the transaction.

I can understand their main concern that Heartland will close the physical branches down and stop funding community events.