Macquarie halted as Esanda buy looms

October 8 Macquarie Group’s shares were placed on a trading halt on Thursday amid market rumours Australia’s top investment bank will buy ANZ Banking Group’s vehicle finance unit in a deal worth A$1.5 billion ($1.08 billion).

Macquarie is acquiring the Esanda finance portfolio, which has net lending assets of A$7.8 billion and encompasses retail and wholesale dealer finance on vehicles across Australia.

To pay for the transaction, Macquarie will undertake a placement and share purchase place plan to raise $400 million.

The massive deal will be paid for with existing funding, third party finance and a capital raising. Investors are being asked to buy stock at a skinny discount to where Macquarie’s shares last traded at $77.84.

Nicholas Moore’s strategy to focus on businesses that shelter the firm from the boom-and-bust cycle of investment banking.

Following completion, ANZ’s Common Equity Tier 1 ratio is expected to increase by approximately 20 basis points, the group said in an ASX statement today. The underbidder was China’s HNA Group, advised by Nomura.

Macquarie in mid-September forecast a roughly 40% jump in its first-half profit compared with the same period a year earlier, helped by a weakening local currency and strong performance fees.

That suggests a first-half profit of $1.05 billion, and a full-year result of close to $2 billion.

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