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Category: Takeovers / Housing Industry / Banking / Consumer Finance

Homeloans-RESIMAC merger beefs up scale in non-bank mortgage market

Thursday, 21 Jul 2016 08:31:35 | Michael Janda

Homeloans and RESIMAC will have a bigger slice of the mortgage market post-merger. (ABC News: Nic MacBean)

Two of Australia's major non-bank home lenders are merging to form a $13 billion mortgage provider.

ASX-listed Homeloans is the object of a reverse takeover by non-listed RESIMAC, with the latter firm set to control 72.5 per cent of the merged group.

In addition, RESIMAC's chief executive Warren McLelland will be the CEO of the merged group and RESIMAC will appoint three board directors to Homeloans' two, with plans to appoint an independent chairman later.

The deal will be done by Homeloans issuing new shares to RESIMAC's owners, allowing the merged company to remain on the ASX under Homeloans' listing.

RESIMAC's majority shareholder, Ingot Capital Management, will own 57.3 per cent of the merged company on completion of the deal.

The deal brings together two non-bank home loan providers with very different business models.

Homeloans focuses on writing mortgages using wholesale funding, with National Australia Bank and Macquarie Group amongst its shareholders.

RESIMAC uses securitisation to fund its home loans - that is where individual loans are bundled together and sold to investors as a mortgage-backed security.

The two companies issued a combined total of more than $3 billion in new loans over the past financial year.

The companies had a combined profit of nearly $14 million in the 2014-15 financial year, making them relatively small players in a mortgage market absolutely dominated by the four major banks.

The deal has been unanimously recommended by the boards of both companies, provided no superior offers emerge, and is expected to be voted on in early October and completed by the end of that month should it receive shareholder approval.

Homeloans shares last traded at 47 cents before going into a trading halt around midday yesterday.

AustraliaPlus


 

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