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The merger between an Australian bank and a major aggregator could see the latter list on the Australian Stock Exchange.
In a trading update last week, Kalgoorlie-based ADI Goldfields Money Limited advised shareholders that it had signed an agreement with Finsure to acquire 100 per cent of the diluted shares in Finsure via the issue of Goldfields Money shares.
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The directors of Goldfields Money believe that the deal will be “transformational” for the bank and, if implemented, will deliver substantial value for shareholders.
Speaking to The Adviser, the co-founder and managing director of aggregator Finsure and 1300HomeLoan, John Kolenda, said: “We believe that a merger with Goldfields will achieve many strategic benefits and also allow us to achieve one of our goals in becoming a publicly listed company on the Australian Stock Exchange.
“The proposed merger will give Finsure greater opportunities to expand our product and service offerings to brokers. It also allows us to explore other acquisitions and improve our future growth prospects.”
However, Mr Kolenda said that, “given the nature of the proposed merger”, the process could take “several months”.
He added that the aggregator would continue to keep the industry and broker network updated on the progression of the deal.
Merger details
The key commercial terms of the proposed deal would see Goldfields Money merge with Finsure by acquiring 100 per cent of the diluted shares in Finsure via the issue of Goldfields Money shares.
Goldfields Money shares would be valued in the transaction at $1.50 per share.
If implemented, the merger would 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 would 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 would continue to comprise a majority of independent directors, with Finsure shareholders entitled to nominate one Goldfields Money director (Mr Kolenda) at the invitation of the current Goldfields Money board.
The existing management would continue to be responsible for regulation, risk and compliance in relation to Goldfields Money’s banking licence.
Goldfields shareholders will be given the opportunity to cast a simple majority vote on the Finsure offer once the Merger Implementation Agreement is brought in on 22 December.
As at 30 June 2017, Finsure has a network of 1,200 loan writers across Australia and a historical book of approximately $26 billion.
