Unveiling an $8.2 billion purchase of Esanda dealer finance from ANZ Banking Group, Macquarie also upgraded its earnings guidance for its interim results a second time, putting it on track to report a profit of $2 billion or more for the year ended March 31.

Macquarie chief executive Nicholas Moore attributed Thursday's upgrade to the bringing forward of a performance fee from an asset sale and favourable trading conditions in financial markets.

The asset driving the performance fee, was held in an unlisted-Macquarie fund which also reflected a single investment. Sources pointed to the sale by Macquarie of Moto, Britain's largest motorway services company.

Macquarie said its interim profit would surge 55 per cent on the same period last year. The second-half result would be lower than the preceding six months, but overall profit for the year ended March 31 would be higher than last year.

That suggests a first-half profit of $1.05 billion, and a full-year result of close to $2 billion. Macquarie has also benefited from a lower Australian dollar as it earns the lion's share of income outside Australia.  

Dividend lift

Macquarie expects its interim dividend to be $1.60 per share franked at 40 per cent, up from $1.30 per share in the same period a year earlier. That reflects a payout ratio of 50 per cent less than Macquarie's slated 60 per cent to 80 per cent range.

Macquarie investor and head of Cadence Capital Karl Siegling said the Esanda transaction was a "good deal" for Macquarie, and that the stock would likely trade higher as investors had anticipated a larger capital raising to fund the transaction.

"The stock will be strong post raising as the market was expecting a raise two-to-three times larger," he said, adding that a $2 billion annual profit for Macquarie was achievable. Analysts are expected to raise their expectations for Macquarie's annual result to more than $2 billion, well surpassing the firm's pre-GFC record of $1.8 billion.

Buying spree

The purchase of the Esanda division follows more than 12 acquisitions announced by Macquarie, locally and offshore this calendar year. Those include a portfolio of aircraft from AWAS and joint bids for Crown Castle and assets of Apache Energy.

Including debt, the Esanda deal is among Macquarie's biggest buys but remains smaller than joint transactions the firm pursued before the global financial crisis such as the acquisition of London's Thames Water.

The purchase of the Esanda unit will see Macquarie's motor vehicle finance assets climb to $17 billion, from $9 billion now. About $6.2 billion of the Esanda assets are retail receivables, while $1.6 billion are bailment and other finance offered to car dealers.

The Esanda portfolio being sold has a book value of $7.8 billion, net of provisions and excluding capitalised origination fess and unearned income, implying a purchase premium of about $423 million.

Mr Moore said Macquarie had an advantage over rival bidders in securing the ANZ unit, due to benefits of having an existing business and systems. 
"There will be good synergy benefits as a result of the combination of the businesses," he told reporters, referring largely to cost savings.

Institutional raising for $400 million

Macquarie said it would require $800 million in capital for the acquisition and on Thursday kicked off a $400 million share placement to institutional investors. JPMorgan, Macquarie Capital and Bank of America Merrill Lynch are managing the raising. It is also funding the acquisition through nd a share purchase plan, existing funding sources, and third-party financing.

The stock was placed in a trading halt on Thursday. Investors are being asked to buy stock at a skinny discount and even a premium to where Macquarie's shares last traded at $77.84.

A term sheet showed an initial price range of $75.50 to $77.80 for the raising but as strong interest came in on Thursday afternoon the managers had increased it to $77.80 to $80 a share.

The transaction is expected to be 10¢ per share earnings accretive in its first full year, and will also be accretive to Macquarie Leasing's return on equity following a period of integration. The deal is slated to close by October 31. Macquarie and ANZ announce earnings at the month's end.

Mr Moore, trumpeted the purchase on Thursday, saying the aquisition was another example of the firm's growth in "annuity style" businesses, which are less leveraged to financial markets.

"Macquarie has been a long-standing supporter of the motor vehicle industry," he said. "The [Esanda] portfolio is in a market in which Macquarie has significant expertise and has successfully integrated similar acquisitions, such as GMAC and Ford portfolios."

ANZ to focus on core business

ANZ's chief for Australia Mark Whelan said the sale to Macquarie reflected the bank's desire to focus on "core businesses," while further strengthening its capital position. The sale will see ANZ"s common equity tier one ratio increase by about 20 basis points.

Mr Whelan said ANZ would book a $100 million profit on the Esanda finance sale, but that the priority was to release and redeploy the capital tied  up in the business.

"There is a big multiplier effect not only on the capital efficiency but also in the cross sell (of other products)," he said of redeploying the capital into areas such as home and small business lending.

The competition regulator last month said it was comfortable with the proposed purchase by Macquarie The underbidder was China's HNA Group.

Macquarie Capital and Credit Suisse advised on the Esanda unit purchase while Deutsche Bank advised ANZ.