find the latest legal job
Corporate and Commercial Partner
Category: Corporate and Commercial Law | Location: Adelaide SA 5000
· Adelaide CBD · Join a leading Adelaide commercial law firm
View details
Freelance Project Finance Lawyers
Category: Other | Location: All Australia
· Vario are looking for freelance lawyers with experience in project finance ideally within the renewable energy sector
View details
Vario Freelance Lawyers
Category: Construction Law | Location: All Australia
· We are looking for lawyers who appreciate the endless possibilities that a freelance career can offer.
View details
Freelance Construction Lawyers
Category: Construction Law | Location: All Melbourne VIC
· We are looking for construction lawyers who appreciate the endless possibilities that a freelance career can offer.
View details
Banking Associate - 1-6PQE - Allen & Overy
Category: Banking and Finance Law | Location: United Kingdom
· Banking Associate - 1-6 PQE - Allen & Overy
View details
CBA deal once in a lifetime

CBA deal once in a lifetime

The Commonwealth Bank of Australia (CBA) is now awaiting regulatory approval for its proposed $2.1 billion acquisition of BankWest from British bank HBOS. HBOS sold both BankWest and the St…

The Commonwealth Bank of Australia (CBA) is now awaiting regulatory approval for its proposed $2.1 billion acquisition of BankWest from British bank HBOS.

HBOS sold both BankWest and the St Andrew’s wealth and insurance business to Commonwealth Bank of Australia as part of the transaction. A definitive sale and purchase agreement has been signed by the parties, and completion of the deal is now subject only to final regulatory approvals.

Freehills partner Philippa Stone summed up the commercial significance of the transaction: “It was a very advantageous deal which the CBA was able to do because the vendor, HBOS, was under significant pressure in the United Kingdom.”

She added that the deal also had significance for the dealmakers because of the unusual conditions in which it was negotiated, as well as the size and significance of the deal itself. “It was an extraordinary transaction, involving the acquisition of a major bank as well as the St Andrews wealth management business, but in circumstances where the deal needed to be done in a compressed time frame because of the vendor’s commercial imperatives and would not have been achievable at the price paid in other circumstances,” she said.

The billion-dollar transaction was the banking equivalent to a bargain basement deal for the CBA, and could be the first of many opportunistic mergers and acquisitions in months to come. But it takes more than savvy investor instincts to capitalise on the precarious position of the world’s finance institutions in the wake of the credit crisis. Manpower was the order of the day for the successful completion of the CBA BankWest deal.

With market pressures dictating the need for a quick sale, an army of lawyers from Freehills (CBA) and Clayton Utz (HBOS Australia) were working furiously behind the scenes. Freehills’ Stone declined to comment on the actual time frame of the transaction, but admitted to pulling an all-nighter at the offices of HBOS advisors Clayton Utz on the night before the deal’s announcement.

Freehills’ team, led by Stone and fellow partner Tony Damian, had more than 30 lawyers working across due diligence, sale agreement negotiations, regulatory issues and the capital raising. Clayton Utz was led by Rod Halstead and Karen Evans-Cullen, who, together with senior associates Kylie Cooper and Jasmine Sprange, were responsible for preparing and negotiating the sale documentation. Both teams worked closely with CBA General Counsel David Cohen and CBA Legal Services solicitor Georgina Koch.

Speculation about the deal was rife in the final days of negotiations, promoting both parties to issue statements on 7 October confirming that talks were taking place, but denying any final agreement had been reached. The deal was made public on 8 October.

Stone — who was also part of the Freehills team that advised Commonwealth Bank on its $10 billion acquisition of Colonial in 2000 — said the timing of the deal was a credit to the CBA, who had managed to engender the deal at the “exact right moment”.

“I think it was the exact right moment to buy BankWest because it was very shortly after the deal [was agreed] that the Bank of England announced they would inject equity into UK banks, including HBOS,” she said.

The transaction also involved setting up a contemporaneous $2.0 billion institutional placement to fund the acquisition. CBA successfully raised the capital, although it was not underwritten.

“The whole deal was fully funded by a concurrent capital raising (on which Freehills also acted) in any case, and then, of course unexpectedly, the funding environment for banks was made even more benign by Treasurer Wayne Swan’s announcement the following Sunday,” Stone said.

Between the plummeting share price of HBOS in the United Kingdom, and a bail-out announcement by the British Government, CBA has managed to broker a buy-out deal for BankWest, prove its capital raising credentials, and, at the same time, expand its presence in the South Australian banking market.

Like this story? Read more:

Book commemorates diamond milestone for WA law society

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

CBA deal once in a lifetime
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Jan 23 2018
Disrupting traditional archiving and storage methods
Promoted by Fileman TRENDS COME and go but technology and its disruption to the legal landscape h...
Scales of Justice
Jan 23 2018
WA to close ‘legal loophole’ on gender reassignment laws
Laws in Western Australia will soon change to permit married people to undergo gender reassignment s...
Lawyers take to Twitter to share career stories
Jan 22 2018
Lawyers take to Twitter to share career stories
The #mypathtolaw hashtag has been embraced by legal eagles to swap stories with the Twitter communit...
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...