ANZ jumping on float bandwagon

By Richard Braddell

WELLINGTON - Westpac could well take comfort in the adage that imitation is the sincerest form of flattery with ANZ Banking Group announcing it, too, is to issue a New Zealand class of securities that will track the performance of the global group.

The float will be a similar size to Westpac's, raising around $700 million.

ANZ's rush to follow Westpac opens speculatation as too how long it will be before the other two Australian banks with New Zealand operations, National Australia Bank and Commonwealth Bank of Australia, follow the same track..

ANZ's managing director, Dr Murray Horn, said ANZ, too, was looking to moderate an imbalance between local shareholders who own a mere 3 per cent of the group and local operations which contribute 15 per cent of profits.

The new securities would be denominated in New Zealand dollars but would be designed so they would track the ANZ group's share price and have the same dividend income distribution.

And because the New Zealand registered investment vehicle would generate imputation credits of its own, the new securities would overcome the tax inefficiency involved in investing directly in Australian stocks arising from the inability to use Australian imputation credits in New Zealand, Westpac unveiled the details of its $800 million float on Monday.

Dr Horn said the ANZ's offer was likely to hit the market around March 2000 and would be "similar but different" in structure from Westpac's.

Instead of the company structure adopted by Westpac, local investors in ANZ would put their money into a trust which, in common with the Westpac structure, would transfer the money to the global group's coffers leaving investors secured through rights to exchange units into head shares in certain circumstances.

But while Westpac emphasised that its float owed much to its desire to strengthen its New Zealand brand and customer loyalty, Mr Horn placed more emphasis on the local appetite for another quality banking stock as a reason to list.

"But the fact that Kiwis own it is good for our position in New Zealand," he said.