Own Westpac shares? The plan for a $1 billion division sale

Bidders are queuing up to buy the bank's investment platform segment, according to reports.

| More on:
A man working in the stock exchange.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Westpac shares ended the week at $19.90 after slipping into the red on Friday
  • The bank is set to sell its investment platform next month to the highest bidder
  • Westpac shares are down more than 20% over the past 12 months

The Westpac Banking Corp (ASX: WBC) share price ended Friday in the red, down 0.2% to $19.90. It comes as a number of bidders are reportedly lining up to acquire the bank's investment platform business, when it attempts to sell in August.

Reports have surfaced suggesting Westpac has various finance giants interested, ranging from asset managers and investment banks to private equity.

Westpac's $1 billion divestment

It's understood that non-binding bids for the bank's planned divestment of its investment platform segment have come in at around $1.2 billion.

This was below Westpac's expectations of around $1.5 billion, The Australian reports.

Meanwhile, the intended sale – planned for next month – is facing inquisitions from a number of players interested in participating in the bid.

Bain Capital and Colonial First State are purportedly interested, while Macquarie Group Ltd (ASX: MQG) and AMP Ltd (ASX: AMP) were reported to be "best-placed to buy the unit", The Australian said.

The planned sale comes at the same time rival banking giant Australia and New Zealand Banking Group Ltd (ASX: ANZ) looks to acquire accounting software firm MYOB in a $4.5 billion transaction.

ASX-listed banks had a tough day on Friday after US investment banking giant JPMorgan Chase & Co posted weaker earnings overnight and announced it was set to wind back its buyback program. The S&P/ASX 200 Financials Index (ASX: XFJ) ended the day's trading down 0.39%.

However, the Westpac share price has been on a downward trend for the past 12 months and now rests around 20% in the red over that period (see graph below). It has also fallen 8% so far this year.

TradingView Chart

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Bank Shares

A young woman sits at her desk in deep contemplation with her hand to her chin while seriously considering information she is reading on her laptop.
Bank Shares

CBA shares are now worth a total of more than $300 billion. Here's why that's a problem

CBA’s ever growing stock market dominance is raising red flags. But why?

Read more »

An excited man stretches his arms out above his head as he reaches a mountain peak.
Record Highs

Breaking: CBA shares hit a new record of $180

CBA shares can't possibly keep rising can they?

Read more »

A small child in a judo outfit with a green belt strikes a martial arts pose with his hand thrust forward.
Bank Shares

Forget the big 4 banks, Macquarie tips 11% upside for this ASX All Ords Financials stock

This broker is telling investors to look beyond CBA.

Read more »

View of a business man's hand passing a $100 note to another with a bank in the background.
Bank Shares

What price should I pay for the Big 4 banks?

Macquarie has updated its target price on Australia’s Big 4 banks.

Read more »

Bank building with word Bank on it.
Bank Shares

What happened with the big four ASX 200 bank stocks in May?

Guess which ASX 200 bank stock led the charge higher again in May.

Read more »

An ASX investor in a business shirt and tie looks at his computer screen and scratches his head with one hand wondering if he should buy ASX shares yet
Bank Shares

After the recent RBA rate cut, why is Macquarie underweight ASX bank shares?

Macquarie is not banking on strong returns from this sector.

Read more »

Business people discussing project on digital tablet.
Bank Shares

CBA vs Macquarie shares: Which one is best?

Ord Minnett has given its verdict on these giants.

Read more »

A woman wearing yellow smiles and drinks coffee while on laptop.
Bank Shares

How the CBA share price smashed the benchmark to close May at all-time highs

I hope you didn’t sell your CBA shares in April!

Read more »