The Westpac Banking Corp (ASX: WBC) share price will be one to watch on Tuesday.
This follows the release of an update on a proposed asset sale this morning.
What did Westpac announce?
According to the release, Westpac has revealed that its plan to divest its Pacific businesses has been dealt a blow.
Late last year, the bank announced the sale of its Pacific businesses to Kina Securities Limited (ASX: KSL) for up to $420 million. This was part of its strategy to simplify its operations and focus on banking in Australia and New Zealand.
At the time, it warned that the sale was subject to regulatory approvals in both Fiji and Papua New Guinea.
Speaking of which, in July, the banking giant revealed that the Papua New Guinea’s Independent Consumer and Competition Commission (ICCC) released a draft determination relating to the sale. That draft determination indicated that the ICCC was proposing to deny authorisation to Kina Securities for the proposed acquisition of Westpac’s stake in Westpac Bank PNG.
Unfortunately for Westpac and Kina Securities, the ICCC has now released its final determination and no changes have been made. The Commission has denied authorisation for the sale.
Westpac has acknowledged the ICCC’s determination. It has advised that it will continue to operate the businesses as normal while it reviews the impact on the sale.
Is the Westpac share price in the buy zone?
One leading broker that sees value in the Westpac share price is Citi. Late last month the broker put a buy rating and $30.00 price target on its shares.
Based on the current Westpac share price of $25.64, this means potential upside of 17% over the next 12 months.
Citi appears positive on Westpac’s cost cutting plans and expects this to help offset top line headwinds.