United States group pitches $2.2 billion cash bid for Veda

Shares in Veda Group, Australia’s largest credit reference agency, soared after a takeover offer from US-based credit bureau Equifax.

Equifax has submitted a written expression of interest proposing a purchase price of $2.70 a share in cash to Veda shareholders. The indicative offer represents a 35% premium to Veda’s closing share price Thursday.

Veda went into a trading halt on Friday morning, pending the announcement.

The firm was previously run under the moniker of Baycorp Advantage, after a merger of Australian company Data Advantage and New Zealand Company Baycorp in 2001.

Macquarie and Herbert Smith Freehills are advising Veda. The deal would hand it the credit information of about 20 million people and 5.7 million companies in Australia and New Zealand.

The total value of the approach is $2.28 billion.

“The board of directors of Veda intends to evaluate the expression of interest and will update its shareholders and the market in due course”.

“The proposal is subject to a number of conditions including due diligence and regulatory approvals, which includes FIRB approval”, Veda said in an ASX statement. Analysts have said the system, which is expected to take several years to roll out fully, promises a lift in revenue for companies such as Veda since it will open up additional information about the accounts individuals have and how well they meet repayments. The private-equity firm in February moved to sell its remaining shares in Veda.

Veda reported an annual net profit of $77.9 million in the 2014/15 financial year, up 248 per cent on the net profit of $22.4 million a year earlier.