TelstraSuper board has called off the merger with Equip Super, citing best financial interest of members
The board of the $26 billion TelstraSuper has called off the proposed merger with $36 billion Equip Super, stating it was not in the best financial interest of members to proceed with the proposed amalgamation.
“Bringing together two medium-sized funds is a complex process,” TelstraSuper said in a statement.
As the merger process has progressed, and particularly in the period since the binding agreement was signed, it has become evident that TelstraSuper is unlikely to achieve our objectives for the merger, in the best financial interests of the fund’s members – TelstraSuper
“As the merger process has progressed, and particularly in the period since the binding agreement was signed, it has become evident that TelstraSuper is unlikely to achieve our objectives for the merger, in the best financial interests of the fund’s members.”
Equip Super Reacts Disapppointed
The decision came as a surprise as the funds had signed a binding Heads of Agreement in November to proceed with a merger of equals, after announcing the merger plans in September.
“We are disappointed that TelstraSuper’s Board has taken this decision,” Michael Cameron, Chair of Equip Super, said.
We are disappointed that TelstraSuper’s Board has taken this decision – Michael Cameron, Equip Super
“Over the past 10 years we have grown significantly through a number of successful mergers, including with Catholic Super and with the Rio Tinto, BOC Gases and Toyota corporate funds.
“We will continue to explore further growth,” he said.
Looking for a Custodian
For TelstraSuper, part of the reason to look for a merger partner last year was that its custody contract with JP Morgan would come to an end in 2025 and this would provide a good opportunity to transfer the fund’s holdings.
However, it is understood that TelstraSuper has decided to move to Northern Trust, the same custodian as Equip Super, despite the fact that the merger will no longer proceed. Having appointed a new custodian might take some pressure off TelstraSuper to find a merger partner.
TelstraSuper’s board said it will continue to review the strategic direction of the fund.
“TelstraSuper remains committed to helping members achieve the best retirement outcome possible and would like to thank Equip Super for their engagement throughout the process,” Anne-Marie O’Loghlin, Chair of TelstraSuper, said.
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