The old pop song talks about 'breaking up' being 'so hard to do'.
In corporate deals, rejection and a breakdown in a relationship usually involves keeping the stockmarket informed.
That's tough, and so it was yesterday for a couple of leading corporates.
We'll look at the exchange of statements in the Coles takeover situation shortly, but those ambitions the Bank of Queensland had for a long term relationship with Bendigo Bank, are over.
Shattered by a final 'no' from the folk from the Victorian countryside.
Bank of Queensland (BOQ) yesterday walked away from its bid for Bendigo Bank after the regional lender rejected a revised informal proposal for a merger.
Not a formal offer mind you, but a 'revised informal' offer.
Was commitment a problem in this relationship?
BOQ announced that its offer had been rejected, with chairman Neil Roberts, saying the failure of the proposal was "disappointing".
The announcement to the ASX was the first the market knew about the new attempt by BOQ to woo the Bendigo Bank and the first attempt in April was rejected.
BEN said the first offer from BOQ, worth $2.5 billion, was neither "certain nor compelling".
The revised proposal included an all-cash option as an alternative to shares in the merged entity.
(Which wouldn't have been terribly smart given the dominance of the small shareholding, mostly owned around Bendigo, in the BEN register.)
As we are seeing with Coles, small shareholders want the chance to rollover their capital gains tax liabilities.
BOQ said it would no longer seek a merger with Bendigo, and would instead concentrate on its existing organic growth strategy and acquisition opportunities.
"The Board of BOQ will no longer seek a merger of the two banks and will pursue its existing strong organic growth strategy as well as strategic acquisitions as opportunities occur," BOQ said in the statement to the ASX.
BOQ Chairman Neil Roberts said: "The failure of the talks with Bendigo Bank is disappointing. We believe a merger made a lot of sense. Our proposal in March followed two years of informal discussions between the two banks.
"BOQ will now focus on other strategic initiatives to grow the bank, in addition to its strong organic growth strategy".
BOQ also reaffirmed its previously announced market guidance, saying it was confident of continued above market growth.
BOQ fell 13 cents to $17.81 and Bendigo Bank shares were up 4c to $16.37.
The immediate judgment is that BEN shareholders are the winners, but time will tell.
…………
And then we come to Coles Group, where the situation about its latest rejection seems to be a case of denial.
Coles says the remaining three buyout groups led by TPG of the US, are still in the game. The group says it hasn't withdrawn, but everyone else says they have.
That saw Coles group shares shed a lot of value yesterday for the second time in a week.
They finished at $16.55, down 35c and only 12c above where Wesfarmers launched its first bid.
At one stage yesterday Coles shares fell below that level to $16.43. Turnover was more than 16.8 million shares, an indication that speculators are bailing out of the stock.
The departure of the TPG group would leave Wesfarmers and its partners as the only realistic bidders for Coles Group.
TPG and its partners Carlyle Group and Blackstone Group LP emailed a statement to media and others yesterday saying they "have not announced'' their withdrawal.
But nothing else was said about the status of the bid and the group declined any further comment. That's a sure sign that things are not all that happy in the TPG/Carlyle Group/Blackstone camp
(Carlyle and Blackstone also passed on the Ten Network and Carlyle also missed out on part of APN News and Media)
Coles, for its part, issued a statement saying that it hadn't been advised that TPG has withdrawn and would be meeting bankers for the group yesterday.
So, if that was the case, why was the story of the TPG group withdrawal all around the media and the market yesterday morning?
Last night more confusion withreportsthat the TPG group had been talked into remaining in the bidding process.
If so, it raises the question why Coles hasn't issued a statement telling the market what it should know?
Coles must be feeling a bit like the fish in the John West Ad: the fish that John West rejects, after the original private equity group, KKR quit, taking with it Bain Capital and another buyout group from the US.
Yesterday's reports said TPG and the other US buyout groups quit after talks with Woolworths broke down Wednesday on just how much money the Australian retail giant would contribute to any buyout offer.
Woolies was important because it was a source of shares for TPG to use to offer Coles shareholders the option of rollover relief for their capital gains tax liabilities.
Wesfarmers paid $16.47 a share to build a 12.8 percent stake in Coles before launching its $19.7 billion offer for the retailer on April 3.
Shares of Wesfarmers ended up 61c to $44.89, after earlier reaching a record $45.00 yesterday.
Its bidding group includes Macquarie Bank and buyout firms Pacific Equity Partners and Permira Holdings Ltd.
Wesfarmers has let it be known that it is thinking of boosting the scrip component of its offer from 25 per cent, to around 40 per cent of its offer, which has put pressure on TPG to match. Hence the drawn out, but failed talks with Woolies.
