Non-bank lobs $25m takeover bid for ADI

One of Australia’s largest non-bank lenders has made a takeover bid to acquire an ASX-listed ADI for approximately $25 million.

Goldfields Money Limited, an authorised deposit-taking institution (ADI) that offers deposits and mortgages, announced last week that Firstmac, its largest shareholder, has offered to acquire all the company’s shares at a price of $1.12 per share. Based on the 22.52 million shares on issue, the offer is approximately $25 million.

In a trading update, Goldfields Money said that it is reviewing Firstmac Holdings’ bidder’s statement in relation to the offer and is preparing its target’s statement in accordance with statutory requirements.

“In particular, Goldfields Money is seeking further clarification regarding the impact [that] the treasurer’s approval conditions, as set on pages 27 and 28 of the Bidder’s Statement, may have with regards to the ongoing operations of Goldfields Money.

“The target’s statement will include your directors’ formal recommendation in relation to the offer, together with an independent expert’s report, which will contain an opinion of the expert as to whether the offer is fair and reasonable.

“It is currently anticipated that the target’s statement and independent expert’s report will be released by 30 October 2017.”

Earlier this week, the company announced that Firstmac CFO James Austin had not been re-elected to the Goldfields board at the group’s AGM in September.

Firstmac has been hungry for a banking licence for years. Back in 2014, the lender provided a submission to the Murray Inquiry calling for the removal of ownership restrictions preventing it from applying for an ADI licence.

Mr Kim Cannon, the lender’s managing director, said: “No other country in the world imposes this ownership restriction which effectively acts as a barrier to entry for groups such as Firstmac wishing to transition.”

The Firstmac Group, which is 100 per cent privately owned, is restricted in applying for an ADI licence due to the cap on individual ownership sitting at 15 per cent.

“The banking act and its shareholder limitations is stifling much-needed competition in the banking sector,” Mr Cannon said.

“It is the entrepreneurs that drive innovation and reduce consumer costs in the marketplace through the introduction of technological advances that drive down cost of delivery, improve service and provide greater choice for consumers.”

The managing director also noted that access to capital was critical for the survival of the non-bank sector.

“Without access to capital, the number of ADIs will continue to decline as a result of the need to consolidate to survive.”

Last year, Mr Cannon told Mortgage Business that Firstmac was up for sale. Reports suggested that the non-bank could be worth $500 million. It has a loan book valued at approximately $8 billion.

[Related: Firstmac to be sold]

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