REA Group swoops on Mortgage Choice with $244m takeover bid
REA Group has launched a $244 million takeover of Mortgage Choice, as the real estate listings business seeks to ramp up its growth in mortgage broking.
REA, which is majority owned by News Corporation, on Monday revealed it had offered $1.95 a share for Mortgage Choice, a premium of 66 per cent on the previous trading price.
REA chief executive Owen Wilson says buying Mortgage Choice will accelerate its push into financial services.Credit:Eamon Gallagher
The Mortgage Choice board is unanimously recommending shareholders support the takeover, which will see the broker team up with REA’s Smartline broking business.
REA said the takeover would accelerate its push into financial services, by leveraging the company’s digital expertise and its large audience of property buyers.
Mortgage Choice has a loan book of $54 billion, more than 380 franchises across the country and it made a net profit after tax of $4.1 million in the latest half.
REA’s chief executive Owen Wilson said the deal was an “exciting opportunity for REA to create a leading broking business.”
“It builds on our success to date, accelerating our financial services strategy while leveraging our existing strengths and capabilities,” Mr Wilson said.
Mortgage Choice chairman Vicki Allen said the takeover bid was “very attractive” for shareholders, and subject to no better offers emerging, it would recommend they vote in favour of the deal.
“Joining forces with REA, and in particular their Smartline broking business, combines our strong brand with REA’s impressive digital capability and property insights,” Ms Allen said.
“It further establishes Mortgage Choice as one of the leading broking groups in Australia and will enable Mortgage Choice to operate at greater scale with an improved service offering to brokers and their customers.”
The proposed takeover is the latest sign of consolidation in the mortgage broking sector, which arranges about 60 per cent of new home lending in Australia. Brokers have been under pressure to upgrade their technology systems in recent years, as fintech firms look to disrupt the lucrative financial services sector.
Commonwealth Bank’s Aussie Home Loans is also merging with digital broker Lendi, in a deal announced in November that will see CBA divest 55 per cent of its holding in Aussie.
More to come
Most Viewed in Business
From our partners
Source: Read Full Article