Credit Unions: The Godfather Mergers - Part IV

 

 "Sonny, it’s not personal. It’s strictly business.  - M. Corleone

The discussion of the proposed merger between BECU and SAFE credit unions is heating up! The merger has gained notoriety not because it is unique, but because it may foreshadow the demise of credit unions as cooperative financial alternatives. The irreversible paradigm shift, the canary in the cooperative coal mine.

BECU announced the takeover in a lengthy press release [link]. Of important note was that BECU had hired the global investment firm Jefferies, LLC [link] to advise them on the acquisition.  Jefferies rates itself as "the leading pure-play investment banking and capital markets firm" - apparently in the world. 

Evidently, Jefferies has advised the BECU Board of Directors to accept the gift of the $4 billion credit union, along with $400 million in cash, from the SAFE Board of Directors. That appears to be excellent advice from Jefferies for BECU! It is not clear who is advising the SAFE Board of Directors.

An alternative merger proposal has been put forward [link], suggesting that the SAFE Board distribute that $400 million in reserves to the SAFE membership prior to the merger - a pro rata distribution of @$1,639 per member. Clearly a superior proposal to giving the store away.

      Some blah, blah, blah "folks" have questioned why BECU would accept that proposal ? Lets take that question in a couple of bites over the next few days; but here's the first question for your consideration:

✅ What if the alternative merger proposal instead was to distribute $100 to each of the 244,000 SAFE member-owners (@$24.4 million) prior to the merger? BECU would then receive a free credit union and @$375 million in cash! What would Jefferies advise? 

✔ Would the SAFE Board (and its' advisors?) agree to that proposal?

  BTW, I apologize if you've been tripping over lots of overturned rocks this week, the trolls have absolutely frenzied on this topic and are surfacing everywhere...

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