Bank of Queensland Limited (ASX:BOQ) entered into an agreement to acquire Members Equity Bank Limited from 26 Australian industry superannuation funds for AUD 1.3 billion on February 22, 2021. The purchase price is subject to completion adjustments amounts. The transaction will be funded by an underwritten AUD 1.35 billion equity raising (at AUD 7.35 per share) consisting of AUD 350 million institutional placement and AUD 1 billion pro-rata accelerated non-renounceable entitlement offer. In case the deal gets terminated, Bank of Queensland Limited must pay a break fee of approximately 1% of the purchase price to the sellers. The acquisition price represents an implied acquisition multiple of 1.05x Members Equity Bank Limited's FY20 reported book value and 11.9x Members Equity Bank Limited's FY20 cash underlying earnings. Members Equity Bank Limited base in Melbourne will remain and the Members Equity Bank Limited brand will be maintained and grown. Following completion of the acquisition, ME Bank will maintain its brand and continue to be based in Melbourne. Prior to completion, BOQ and ME Bank will continue to operate as separate businesses with no immediate changes expected for customers of either business.

The transaction is subject to regulatory approval pursuant to the Financial Sector (Shareholdings) Act 1998 (Cth). The transaction was unanimously approved by the Board and the shareholders of Members Equity Bank Limited. As of June 21, 2021, the transaction has been approved by Treasurer of the Commonwealth of Australia. Completion of the acquisition is targeted before the end of Bank of Queensland Limited's 2021 financial year. As of June 21, 2021, the deal is expected to be completed by July 1, 2021. The acquisition is expected to be low double-digit to mid-teens cash EPS accretive including full run-rate synergies in the first year (FY22). The acquisition is also expected to be cash ROE accretive, by over 100bps including full run-rate synergies in the first year.

Luminis Partners is acting as financial advisor while King & Wood Mallesons is acting as legal advisor to Bank of Queensland Limited. Macquarie Capital acted as financial advisor to Members Equity Bank Limited. Goldman Sachs and UBS acted as the underwriters for the institutional placement and accelerated non-renounceable entitlement offer. Christine Fleer, Elyse Hilton, Jeremy Lanzer, Matthew Lees, Clint Harding, Bridget Little, Laila De Melo, Charlotte Inge, Miguel Ferreira, Karri Walker, Anna Sandiford, Harriet Craig, Claire Southwell, Rebecca Ryan, Yvonne Truong, Billy Sakis, Sinead Butler, Molly Scott, Aadil Master, Alex Rasmussen, Paralegal Craig Evans, Ryan Taylor and Nicole Phillips of Arnold Bloch Leibler acted as legal advisors to Members Equity Bank Limited in the deal. Macquarie Group Limited (ASX:MQG) acted as financial advisor to Members Equity Bank Limited in the transaction. Goldman Sachs Australia Pty Ltd acting as financial advisor for Bank of Queensland. Ernst & Young Strategy and Transactions Limited acted as financial advisor to Bank of Queensland.

Bank of Queensland Limited (ASX:BOQ) completed the acquisition of Members Equity Bank Limited from 26 Australian industry superannuation funds on July 1, 2021. The directors of BOQ will remain in their existing positions on the BOQ Board and the BOQ Board in its entirety has replaced the Board of Directors of ME Bank (with each director of ME Bank resigning with effect from completion of the acquisition). Deborah Kiers, former ME Bank Director will join BOQ's Board of Directors. The Board changes will take effect from August 5, 2021. As on February 28, 2022, Bank of Queensland has completed a voluntary transfer of all the assets and liabilities of Members Equity Bank Limited (MEBL) to BOQ. Members Equity Bank will continue to be an important brand within BOQ's multi-brand strategy and will operate under Bank of Queensland's ADI license going forward.