The Overseas Investment Office (OIO) said it had rejected the application by China's HNA's to buy UDC from ANZ Bank because of unanswered questions relating to HNA's ownership. HNA is able to apply to the High Court for a judicial review of the OIO's decision.
The local sharemarket, which this week hit another record high, is hungry for new assets to the point where it could probably float the Titanic.
New Zealand banking is dominated by the big Aussie banks and there are pluses and minuses involved with that.
The Kiwi operations of the Aussie banks have been highly profitable for several years but as former ASB Bank and Commonwealth Bank boss Sir Ralph Norris once said: "There's one thing worse than a profitable bank, and that's an unprofitable one."
The Aussie banks have big balance sheets and they stand up well relative to their international peers.
The downside for New Zealand is that billions of dollars in dividends from their local operations wing their way away across the Tasman every year. That forms a significant drain on the balance of payments current account and distorts the local commercial and investment landscape.
At the proposed HNA sale price of $660 million, UDC would make for a decent sized addition to the sharemarket and would add a peer for the home-grown NZX-listed, Heartland Bank, which has a market capitalisation of $557m.
A locally-owned finance company would, albeit in a small way, help redress the banking imbalance that has been part of the landscape since the controversial sale of the Bank of New Zealand to National Australia Bank in 1992.
It's time New Zealand reclaimed the assets that have in the past been sold too quickly, for too little.
