Major aggregator to merge with bank

An Australian bank has inked a proposed merger deal with a major mortgage aggregator after rejecting a takeover bid from one of the country’s largest non-bank lenders.

In a trading update on 23 November, Kalgoorlie-based ADI Goldfields Money Limited advised shareholders that it has signed an agreement with Finsure.

The directors of Goldfields Money believe that the deal will be “transformational” for the bank and, if implemented, will deliver substantial value for shareholders.

The Process Agreement outlines the key commercial terms of a proposal under which Goldfields Money will merge with Finsure by acquiring 100 percent of the diluted shares in Finsure via the issue of Goldfields Money shares.

Goldfields Money shares will be valued in the transaction at $1.50 per share, well above Firstmac’s bid of $1.12 a share earlier this month and beating the non-bank lender’s second bid of $1.27 a share. Goldfields recommended shareholders reject Firstmac’s takeover offer. The non-bank’s founder and main shareholder, Kim Cannon, has made no secret about Firstmac’s desire to obtain a banking licence.

If implemented, the merger will see Goldfields Money issue 40,750,000 shares to Finsure shareholders, comprising approximately 63 per cent of Goldfields Money on a diluted basis including Goldfields Money Performance Rights.

The new shares will be issued at $1.50 per share, valuing Finsure’s equity at around $61.1 million and the merged group at around $97.5 million.

The Goldfields Money board will continue to comprise a majority of independent directors, with Finsure shareholders entitled to nominate one Goldfields Money director, which will be Finsure boss John Kolenda, at the invitation of the current Goldfields Money board.

The existing management will continue to be responsible for regulation, risk and compliance in relation to Goldfields Money’s banking licence.

As at 30 June 2017, Finsure has a network of 1,200 loan writers across Australia and a historical book of approximately $26 billion.

More to come.

[Related: Firstmac lobs $25m takeover bid for ADI]

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