Owing shares not always about the money
A report in the Adelaide Advertiser says that being a shareholder today is not just about the money, with Bendigo Bank’s rejection last week of a $2.5 billion takeover bid from Bank of Queensland illustrating a growing trend and perhaps offering some guidance for Qantas shareholders and APA, with Bendigo’s Board saying, “Get your damn hands off me,” or at least words to that effect.
It was a rebuff that bewildered financial analysts, given BOQ’s bid was 48% above its target’s previous share price – a big premium in takeover terms.
But Bendigo Bank, which has grown its successful community bank brand around Australia, said there were philosophical differences between the two companies and a survey found many of its shareholders had a deep “emotional” attachment to their stock.
Chairman Robert Johanson said shareholders were not interested in making quick short-term profits and instead were “more interested and confident in our long-term proposition”, with Bendigo’s Board even ignoring assurances from BOQ that it would retain the Bendigo name, brand, headquarters and community banking model.
It’s great to see the little fellas fight back, particularly at a time when there is a takeover feeding frenzy underway in Australia as cashed-up private investors try to swallow companies such as Qantas and Coles.
There are plenty of Qantas shareholders who would rather keep their shares than sell the Flying Kangaroo to private equity interests.
South Australian investors may soon be in a similar position as Bendigo Bank shareholders, with Adelaide Bank seen as a potential takeover target by several analysts.
Will we hold or will we sell for a quick profit?
Our recent history is mixed when it comes to letting go of significant SA companies.
Goldminer Normandy Mining disappeared quickly a few years ago, as did winemaker BRL Hardy and privately owned electrical goods company Clipsal.
But family-owned Coopers Brewery fought a bitter takeover defence against Lion Nathan before emerging victorious in 2006.
And SA’s largest company, oil and gas giant Santos, is takeover proof because the State Government still enforces a 15 per cent limit on individual stakes in the company.
This shareholding cap was put in place in 1979 to prevent Alan Bond from taking over SA’s gas supplies.
That is no longer a concern, and Santos continually says the cap is not in the best interests of its shareholders.
Yet the cap remains, despite the negative pressure it puts on Santos’s share price because there is no potential takeover premium.
Someone, somewhere obviously feels that losing Santos to SA would be worse than its shareholders making a healthy profit from a takeover bid.
Owning shares is not always about the money – perhaps APA and Qants should listen to this message.
A Report by The Mole for material in the Adelaide Advertiser.
John Alwyn-Jones
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