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Rumours swirl as eChoice sale reaches final stages

Mortgage Business understands that a non-bank lender has made an unconditional bid to acquire embattled aggregator eChoice.

It is understood that shortly after the appointment of voluntary administrators Rodgers Reidy on 27 November, Tulloch Corporate Advisory was appointed to run a seven-day sales process for eChoice Limited and 13 of its entities.

"As is typical in a voluntary administration, a number of parties have expressed interest in a purchase of some or all of the companies’ business or assets," Tulloch Corporate Advisory managing director Graham York said. "The discussions between the administrators and these parties are confidential and commercially sensitive, and the administrators will not be commenting on them."

Sources close to the situation told Mortgage Business that a prominent non-bank lender gave an unconditional offer as early as 29 November. Rumours are circulating that Firstmac or Liberty Financial could be potential buyers.

Mortgage Business contacted Firstmac after learning from a number of sources close to the situation that it would be acquiring eChoice.

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Firstmac would not comment on the rumours. However, the Queensland-based lender has been on the acquisition path lately with two failed takeover bids for ASX-listed ADI Goldfields Money. 

Liberty Financial has also been buying up distribution with the acquisition of aggregator nMB and a stake in mortgage insurance provider ALI Group. 

It is understood that the bidder had access to a data room that has since closed. The sales process concluded at close of business (COB) Friday. Sources say that a management buyout is also is also a possibility. 

MoneyQuest CEO and former Mortgage Choice chief executive Michael Russell said an open sales process would have been far better for the eChoice business, the 460 brokers housed within it and the industry as a whole.

“eChoice will always be remembered as Australia’s first home loan comparison website and a digital powerhouse when I first joined the industry. It’s particularly sad for those of us who love this industry to see it continue to be the unwitting parcel in a game of pass the parcel,” he said.

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On 27 November eChoice confirmed that broker commissions, including trail payments made by lenders, would not be impacted by the appointment of voluntary administrators.

The appointment was made by the secured creditor, Welas Pty Ltd, which has supported eChoice for many years but reached the view that it could no longer continue to support the aggregator in its current form.

Welas took the step to appoint the voluntary administrators to enable eChoice to assess its options on how to secure and sustain the future viability of the business.

“The voluntary administrators have not been appointed over any group companies with existing contracts with brokers or lenders,” the company said in a statement.

“Accordingly, the administration will not affect ongoing third-party stakeholder contractual obligations, such as trail payments by lenders to these companies and payments of trail by these companies to brokers.”

[Related: Aggregator confirms voluntary administration]

Rumours swirl as eChoice sale reaches final stages
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