Macquarie to buy ANZ’s US$5.6bil auto finance portfolio

However, it appears all but official that Australia’s largest investment bank, Macquarie Group Ltd (ASX: MQG), has been successful and will buy the $8.2 billion motor vehicle and equipment loan portfolio.

The Esanda portfolio being sold has a book value of $7.8 billion, net of provisions and excluding capitalised origination fess and unearned income, implying a purchase premium in excess of $400 million.

“Macquarie has been a longstanding supporter of the motor vehicle industry and we look forward to continuing to support the Esanda dealers and their retail customers”, chief executive Nicholas Moore said.

In a trading update today, Macquarie announced its intention to conduct an institutional placement to raise $400 million for the acquisition of the ANZ business. Investors are being asked to buy stock at a skinny discount to where Macquarie’s shares last traded at $77.84.

The massive deal will be paid for with existing funding, third party finance and a capital raising.

However the banking giant expects its second half to be weaker than the first six months of its 2015/16 fiscal year but higher than the previous corresponding period.

The sale is expected to boost the bank’s common equity tier 1 capital ratio by about 20 basis points, it said Thursday.

The deal is expected to be 10 Australian cents per share earnings accretive in its first full year.

It did not disclose the equity component of the deal, which media have widely reported at A$1.5 billion.