Second thoughts from St George

Some second thoughts might be emerging at St George Bank in connection with their agreed plan to sell the bank to Westpac (assuming shareholders agree).

Paul Fegan, managing director of St George, told the Financial Review: "There is plenty of time and options for the board, including myself, to reflect on the state of the proposal relative to the current trajectory of the bank and the relative valuation.

"Our share price is trading ahead of the terms [of the offer] - which is clearly a very big consideration."

Westpac's offer, of 1.31 Westpac shares for each St George share, represents a discount of about three per cent to the current market value of St George based on prices yesterday.

The Financial Review reports, without adding any detail, that unease is understood to be growing inside St George's boardroom.

Though whether St George can back away from their merger agreement with Westpac (rather than consider alternative offers) is doubtful.