Demutualisation worth $1160 to MyState members

PKF Corporate Advisory produced a slightly higher estimate on the value arising from the merger of MyState Financial, the largest credit union in Tasmania, with Tasmanian Perpetual Trustees.

PKF estimated the value of the merged entity at between $200 million and $211 million, which gives a theoretical value per MyState Limited share of between $2.97 and $3.14, or approximately $1129 to $1193 for a parcel of 380 MyState Limited shares. MyState published the estimate in the information booklet for members of the credit union yesterday.

Deloitte, in a corresponding report to shareholders in TPT two weeks ago, effectively valued the merged entity at $194 million.

Members of MyState and shareholders in TPT will vote on the proposed merger in a month. For members of MyState the proposal requires that they first agree to demutualise the credit union.

The information booklet shows that MyState recorded a drop in net profit, to $4.3 million, in the half year to December 2008 from $4.9 million in the half year to December 2007. Leaving out "non-recurring items" such as the $1 million cost of preparing for the merger, MyState said net profit increased to $5.4 million from $4.9 million over the half year.

MyState published no June 2009 financials but noted that "revenue growth will slow".

Directors also declined to publish financial forecasts for 2009 or 2010 on the ground of "significant uncertainty about MSF's likely financial performance" and wrote that detailed financial information would be "unduly speculative and potentially misleading".

PKF used slightly slower cost savings from the merger than used by the boards of TPT and MyState. The board estimated these at between $3.5 million and $4.5 million in the third year, but PKF, taking into account cost increases over three years, put these at between $2.9 million and $3.8 million.

Anyone who was a member of the credit union as of October 2008 (when the merger proposal was made public) may vote on the plan.

MyState was formed from the merger of Connect Financial and Island State in June 2007. Almost 36 per cent of the population of Tasmania have accounts with MyState.

There is one other small credit union based in George Town, Heritage Isle, while one building society, B&E, is the other deposit-taking mutual trading on the island.