NAB/Clydesdale Bank demerger! And I thought Asciano deal was complicated…

CDI’s appear to be all the rage at the moment, and they form part of the NAB plan to exit Clydesdale Bank in the UK.  Like the AIO proposal from Nitro (and its’ parent entity Brookfield partnership), these CDI’s (Chess Depository Interests) will eventually be listed on the ASX and the impact of exchange rate variations will no longer be such a direct factor on calculating the true value of your holding (if you choose to hold).

In the meanwhile however, NAB have produced a massive document extolling the possible virtue of retaining your interest in the overseas bank.  Lucky we have such a good festive season break, as this will give you all the opportunity to curl up with a good (?) book (in the form of the NAB document) and then tell me what it all means!

NAB is seeking to exit its investment in CYBG Group, a UK based banking group, by demerging 75% of the CYBG Shares to NAB Shareholders. The demerger is proposed to occur by way of a scheme of arrangement and capital reduction which will result in approximately 75% of the CYBG Shares being distributed to, or for the benefit of, NAB Shareholders.

It is proposed that NAB’s share capital be reduced with the reduction of capital being satisfied by the distribution of CYBG Securities under the scheme of arrangement. If the demerger is implemented, shareholders will retain their existing NAB shares and receive one CYBG share or CHESS depositary interest (CDI) for every four NAB shares they hold. Entitlements to CYBG Securities will be rounded down to the nearest whole number. Eligible shareholders include those with a registered address in Australia or New Zealand and others as per the Scheme Booklet.

The remaining CYBG Shares are proposed to be divested by NAB under the Institutional Offer. However, the Demerger is not conditional on the Institutional Offer proceeding. If the Institutional Offer does not proceed or does not proceed in full, NAB will retain up to 25% of the CYBG Shares on issue immediately following the Demerger (in which case it intends to sell those retained CYBG Shares as soon as practicable after the Demerger having regard to market conditions and the price it can obtain.

It is proposed that CYBG shares and CDIs will be listed on the London Stock Exchange’s (LSE: CYBG) and on the Australian Securities Exchange (ASX: CYB) respectively.

A sale facility for CYBG shares and CDIs will be available to eligible NAB shareholders who individually hold 2,000 NAB shares or less.

In order to take effect, the demerger must be approved by the requisite majorities of NAB security holders, at the Scheme meeting on 27 January 2016.

The indicative timetable is:

2 February 2016 Announcement of Institutional Offer Price

3 February 2016 Commencement of deferred settlement trading of CYBG CDIs on ASX

Closing date for Sale Facility Forms; CDI Election Forms, Share Election Forms*

16 February 2016 Dispatch of holding statements

4 April 2016 Sale Facility proceeds sent to shareholders

*Eligible Australian Shareholders > 2000 NAB shares will automatically receive CDIs (trade on the ASX) unless they request a Share (the share trades on the LSE)

*Small shareholders < 2000 NAB who wish to sell into the Sale Facility must make a “Sale Election” otherwise they will automatically receive CDIs

NAB Shareholder Information Line: 1300 367 647 or 03 9415 4299 between 8:00am – 7:30pm during Business Days.

Regards

Stephen Shortis

General Advice:  Please note that any advice given in this blog is of a general nature only and should not be relied on, as it does not take into account your personal circumstances. If in doubt, please contact your own financial adviser.

2 Responses to “NAB/Clydesdale Bank demerger! And I thought Asciano deal was complicated…”

  1. Edward James ParkerJanuary 2, 2016 at 4:18 pm #

    How do i obtain form to arrange for sale of the shares to be allotted to me following the Demerger

    • StephenJanuary 4, 2016 at 3:17 pm #

      Hi Edward,

      It will automatically be sent to you now that the deal has been approved, and can be returned anytime up until 3rd February 2016.

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