PNG blocks Kina Securities from buying out Westpac’s local business
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But ANZ and Westpac have been trying to moving on from PNG and Kina Securities was set to buy 89.91% of Westpac’s operations in PNG and Fiji in a deal priced at $420 million.
However, the local competition regulator, the Independent Consumer and Competition Commission (ICCC), said the deal cannot proceed.
The ICCC said it was not satisfied with Kina’s case that the deal wouldn’t lessen competition and would have a benefit to the public. The decision came just two months after a preliminary determination which also came to this conclusion.
Kina shares fell by as much as 9% this morning and Westpac’s did too albeit slightly.
In a brief statement to investors, Kina Securities said it was assessing the implications of the decision and was considering its options notwithstanding the decision was final.
Westpac also released a statement acknowledging the decision. It said it would continue to operate the businesses while it reviewed the impact on the sale, implying it would look for another buyer – a step CEO Peter King hinted at during an ICCC hearing last month.
This is not the first blow from PNG authorities towards a major bank this year.
Nevertheless, it hasn’t all been bad news for PNG-focused banks. In the recent reporting season, BSP’s half yearly profit increased 17.6% while Kina’s increased by 36%.