The BNK Banking Corporation Ltd (ASX: BBC) share price is soaring in lunchtime trade amid confirmation of an acquisition deal.
Shares in the company are currently swapping hands at $1.22 apiece, up 17.87%, at the time of writing.
Let's take a look at what BNK Banking Corporation announced today.
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Why is the share price surging?
BNK has agreed to sell 100% of its subsidiary Finsure to MA Financial Group Ltd (ASX: MAF) for roughly $151.6 million.
The sale price represents a 66% premium to BNK's market capitalisation before it announced it was undertaking a strategic review in September.
The ongoing review, due to be completed in early 2022, aims to improve value for BNK shareholders. The sale of Finsure is one of its outcomes.
Finsure is a leading Australian mortgage aggregator with a lending portfolio of $60.8 billion, focused on the home lending market.
Earlier today, MA Financial confirmed it had entered into a binding agreement with BNK to acquire its mortgage broker network.
The acquisition is expected to take place in the first half of 2022 and is dependent on regulatory approval.
Management commentary
Commenting on the news impacting the BNK Banking share price, chairman Don Koch said:
After a detailed assessment, the Board believes the sale of Finsure to MAF represents a compelling outcome for all BNK stakeholders, including shareholders, our people and customers.
The sale price of $151.6 million cash is an attractive valuation and will deliver significant value to BNK shareholders.
The sale price represents a 66% premium to the undisturbed market capitalisation of the group prior to announcement of the strategic review on 21 September 2021.
While Finsure has been growing strongly, the opportunity to be part of MAF, a larger and more diversified financial services group, will accelerate Finsure's ability to grow its presence in the Australian financial services market.
BNK Banking share price snap shot
Today's news coincides with another surge in the BNK Banking share price. It's up more than 74% in the past 12 months.
The company's shares have surged 22% in the last month alone and gained 18% in the past week.
The company has a market capitalisation of nearly $141 million, based on its current share price.
