SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): October 25, 1997
HOMESIDE, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-12655 59-3387041
(State or other jurisdiction of (Commission File (IRS Employer
incorporation or organization) Number) Identification Number)
7301 Baymeadows Way, Jacksonville, Florida 32256
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (904) 281-3000
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Item 5. Other Events.
On October 25, 1997, HomeSide, Inc., a Delaware corporation ("HomeSide"),
entered into an Agreement and Plan of Merger (the "Merger Agreement") by and
between National Australia Bank Limited A.C.N. 004044937 ("NAB") pursuant to
which a wholly-owned subsidiary of NAB (the "Merger Sub") will be merged with
and into HomeSide, with HomeSide being the surviving corporation. Each share of
HomeSide common stock issued and outstanding at the effective time of the merger
shall be converted into the right to receive $27.825 in cash, without interest,
except for (i) shares of HomeSide stock held by stockholders who exercise
appraisal rights under Delaware law or (ii) shares of HomeSide stock held
directly or indirectly by NAB (except for shares held in a fiduciary or agency
capacity or in satisfaction of a debt previously contracted). The transaction is
subject to regulatory approvals and approval by HomeSide's stockholders at a
special stockholders' meeting. HomeSide's major stockholders, BankBoston, N.A.,
Siesta Holdings, Inc. (an affiliate of Barnett Banks, Inc.), Thomas H. Lee
Equity Fund III, L.P. and certain affiliates of Thomas H. Lee Company and
Madison Dearborn Capital Partners, L.P., who collectively own approximately 76%
of HomeSide's outstanding common stock, have agreed to vote in favor of the
approval of the transaction at the stockholders' meeting. The proposed
transaction is expected to close early in the first quarter of calendar 1998.
For more information see the joint press release filed herewith as Exhibit 99.1.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit 99.1 - Joint press release issued October 26, 1997
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HOMESIDE, INC.
Date: October 29, 1997 By:/s/Robert J. Jacobs
Robert J. Jacobs
Vice President
Exhibit 99.1
National Australia Bank acquires HomeSide for US$1,231 million in cash
National Australia Bank and HomeSide, Inc. announced today that they have
entered into a definitive agreement for National Australia Bank to acquire
HomeSide, Inc. The National will pay US$27.825 in cash for each HomeSide share
or a total of US$1,231 million (AUD$1,734 million) representing a 9% premium to
Friday's close. The transaction was unanimously approved by both the National's
and HomeSide's boards and is expected to be accretive to earnings per share from
the date of acquisition.
HomeSide, Inc. is one of the leading United States residential mortgage
loan producers and servicers with approximately US$97 billion of loans in its
servicing portfolio. National Australia Bank is the largest bank in Australia
with retail operations in the United States, United Kingdom, Asia, New Zealand
and Ireland.
In announcing the agreement, the National's Managing Director and Chief
Executive Officer, Mr Don Argus said the acquisition would provide an important
world class capability to the National Australia Bank Group, and is a key step
in the evolution of a global banking and financial services organisation.
"The combination of a world class mortgage operation in HomeSide with our
existing strong Regional Banking franchises will position the Group as a very
competitive international force in the mortgage business" Mr Argus said. "This
is a business where scale economies and innovative distribution are absolutely
essential for future success."
HomeSide's Chairman and Chief Executive Officer, Mr Joe K. Pickett said
HomeSide and the National share a commitment to "integrity, quality and customer
service and a common objective of creating a truly global best practice mortgage
business." After the closing, HomeSide will be a truly international mortgage
company.
"HomeSide has the ability to replicate its highly efficient US mortgage
production operations and servicing capabilities in Australia and the other
regions of the National's international franchise," Mr Pickett said.
"We have the depth of staff and management expertise necessary to continue
to expand our US operations, while assuming responsibility for enhancing the
National's global mortgage operations," he said. "HomeSide is highly focused on
its core activities and is well positioned in a scale and technology driven
industry."
Although a relatively young company, HomeSide's business has evolved from
the mortgage subsidiaries of two well established and reputable banks;
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BankBoston, N.A. and Barnett Banks, Inc. HomeSide's senior management team have
an average of over 20 years experience in mortgage banking.
The company was formed by an investor group consisting of the Thomas H. Lee
Company and its affiliates and Madison Dearborn Capital Partners, L.P., and in
March 1996 acquired certain assets and liabilities of the mortgage banking
subsidiary of BankBoston, N.A. On May 31, 1996, HomeSide acquired the mortgage
servicing operations, assets and proprietary servicing software owned by Barnett
Banks, Inc.,
HomeSide is now the fourth largest producer and seventh largest servicer of
mortgages in the United States. It has a customer base of over one million home
owners throughout the United States and a growing "Consumer Direct" capability.
In its latest financial results, HomeSide reported a net income of US$20.1
million for the three months to August 31. This was an 11 percent increase on
the US$18.1 million earned in the preceding quarter.
HomeSide and the National have explored various options to determine the
best way for HomeSide to enhance the National's mortgage production and
servicing practices in Australia and New Zealand. Significant potential cost
savings from the adoption of HomeSide's operating model have been identified.
Mr Pickett will remain Chairman and Chief Executive Officer of HomeSide and
will be relocating to Australia to oversee the duplication of HomeSide's
processing and servicing practices throughout the National's international
network of regional banks. Mr Hugh R. Harris will remain Chief Operating
Officer, with day to day responsibility for managing HomeSide's US operations.
HomeSide will continue operations under the name HomeSide Lending, Inc.
According to Mr Argus, the potential for cost savings in a highly
competitive core business is one of the most exciting aspects of the proposed
acquisition. "With growing competition the National is redefining businesses
such as mortgages".
"We have identified savings of 20 to 30 percent in variable mortgage
production costs and a potential 45 percent reduction in servicing costs through
use of HomeSide's methods in Australia alone. This will significantly enhance
the value of the National's mortgage portfolio which presently represents over a
third of the Group's lending", Mr. Argus said. Revenue creation opportunities
have also been identified.
The purchase is subject to regulatory approvals and the approval by
HomeSide's stockholders at a special stockholders meeting, HomeSide's four major
stockholders, representing more than 76% of the outstanding stock, have agreed
to the proposed acquisition and will vote in favour of its approval at the
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stockholders meeting anticipated to be held in the near future. HomeSide has
agreed to pay a termination fee to the National in the event the agreement is
terminated for certain reasons. The proposed acquisition is expected to close
early in the first quarter of calendar 1998.
Cohane Rafferty Securities, Inc., Hanover Capital Partners Ltd. and Keefe,
Bruyette and Woods, Inc. advised National Australia Bank on this transaction and
Smith Barney, Inc. and Merrill Lynch & Co. advised HomeSide.
For further information Contact: Ron Burke 613 96413876(Australia)
Haydn Park 613 96413857(Australia)
Judy Garfinkel BH 1 904 281 3319(US)
AH 1 904 737 6270(US)
