IOOF – ANZ Super Deal Faces New APRA Hurdle

By Glenn Dyer | More Articles by Glenn Dyer

More doubt has been cast on the proposed near $1 billion sale by ANZ Bank of its superannuation business to IOOF.

In late 2017, ANZ agreed to sell IOOF its financial planning and pensions business, which includes 700,000 super fund members, for $975 million.

IOOF has completed the acquisition of ANZ’s three financial planning licensees but is yet to finish off the OnePath purchase.

IOOF told the ASX yesterday in a short filing that the deal will need approval from the prudential regulator, APRA.

IOOF said amendments to superannuation laws that take effect from July 1 would give APRA “an approval power” over the acquisition of ANZ’s OnePath Pensions and Investments (P&I).

On top of this, IOOF and ANZ also on Monday gave a firm, mid-October termination date for either company to call off the deal if approvals are not received from ANZ, the board of its independent OnePath trustee and APRA.

Analysts say it is unlikely that all three approvals would be forthcoming before the deadline.

APRA has already launched action in the Federal Court against former IOOF CEO, Chris Kelaher and former chair, George Venardos, to have them banned from working in the superannuation sector.

APRA made the same allegations against IOOF’s chief financial officer David Coulter, its general counsel Gary Riordan and company secretary Paul Vine.

IOOF has said the proceedings would be vigorously defended, but to do so would see the October 17 deadline not met.

IOOF has also received what are called ‘show cause’ notices from APRA for alleged licence breaches for delays to its restructure.

In its statement to the ASX, IOOF said completion of the Pensions and Investments business remains conditional on the receipt of notices from both OnePath and ANZ that each have no objection to the deal proceeding.

Several analysts told the media late yesterday that the ANZ board will be one sticking point because it would have to be satisfied that the clients in the Pensions and Investments business will not lose from the sale.

IOOF said in its statement it “continues to work cooperatively with (OnePath Custodians) and ANZ to provide the information and resources necessary to facilitate those notices being given.”

It said that depending on the timing of receipt of any notices of objection from OnePath and ANZ, the approval of APRA “may also become a condition to completion of the P&I acquisition.”

In its statement, ANZ said the latest update did not change its position of continuing to monitor IOOF’s response to matters raised by the APRA as part of its decision-making process.

The IOOF news and a weak quarterly profit update from the Commonwealth Bank yesterday saw ANZ shares fall 3.9% to $26.43. IOOF shares lost 2% to $5.80.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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