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Yellow Brick Road has moved one step closer to acquiring Vow Financial after winning the approval of Macquarie and Vow chief executive Tim Brown.
Yellow Brick Road announced today that the group made offers yesterday to each of Vow’s 24 shareholders to acquire 100 per cent of the aggregator.
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“The Vow board has unanimously resolved to recommend acceptance of the offers by all Vow shareholders,” the statement said.
“In addition, the directors of Vow have agreed to accept the offers in regards to all Vow shares that they own or control.
“Tim Brown, the chief executive of Vow, and Macquarie Bank, the largest shareholder of Vow, have also accepted their respective offers.
“In aggregate, these acceptances amount to approximately 40 per cent of Vow’s issued capital. Additionally, the Vow management and staff are supportive of the change of ownership.”
The deal also has to be approved by Yellow Brick Road shareholders, who are expected to meet in mid-July to consider the proposal.
Yellow Brick Road executive chairman Mark Bouris said the proposed acquisition was consistent with the company’s strategy to become a leader in the non-bank sector.
Vow will provide Yellow Brick Road with a new national distribution channel and a growing loan book, according to Mr Bouris.
Vow claims to have 700 accredited brokers and a loan book of $19.2 billion, while Yellow Brick Road’s half-yearly results revealed it has a loan book of $2 billion and revenue of $15.3 million.
Meanwhile, The Adviser has obtained a copy of an email Vow sent to its brokers assuring them that it will be business as normal should the deal be approved.
“You will continue to be paid your commissions as normal, your agreements and commission rates will stay the same, your state manager and support team will remain the same, and all of the support services you access will still remain available. Nothing will change that affects your business,” according to the email.
“This is only an offer at this stage. However, under this potential new ownership we will continue to remain as one of Australia’s leading aggregation businesses under the helm of Tim Brown.
“We will keep the Vow Financial brand, including other brands which we own, and will continue to run the mortgage business with our current vision – providing you with a market-leading platform and providing a full suite of products and services for your clients.”
