Baycorp confirms merger with Data Advantage

Credit services company Baycorp Holdings Ltd has announced the completion of merger talks with Australia's Data Advantage to form a $A1.5 billion ($1.79 billion) credit services company.

Data Advantage will offer 1.56 shares for every one Baycorp share, and both companies would pay out a final and special dividend prior to forming the new company, to be based in Sydney, the two companies said in a joint statement.

Baycorp would pay 33.5 NZ cents to its shareholders (13.5 cents in a final dividend and 20 cents special dividend) while Data Advantage would pay 14 Australian cents (six cents final and eight cents special), the companies said.

Baycorp shareholders would have a 58 per cent interest in the merged group (following the cancellation of Baycorp's 9.3 per cent interest in Data Advantage) and Data Advantage shareholders would have a 42 per cent interest.

"From a shareholder perspective, the terms of the merger are eminently sensible and we expect the transaction to be cash EPS (pre-goodwill) positive for all shareholders," the companies said.

Subject to shareholder and regulatory approvals, completion of the merger was expected by the end of the year.

"We estimate synergy benefits to be in excess of A$15 million per annum within three years. To put that into context, it is equivalent to around 30 per cent of the current combined EBIT of both companies," said Baycorp chairman Rosanne Meo, who will chair the combined group.