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A bidding war has erupted between Pepper and RESIMAC, with both non-banks competing for the acquisition of RHG.
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Earlier this week, RESIMAC announced it had put in an offer to acquire 100 per cent of the ordinary shares in RHG for a cash consideration of 44.1 cents per share.
Following RESIMAC’s bid, Pepper today signalled its intentions to buy the company, offering a cash consideration of 46.0 cents per share.
The purchase price would not be reduced by the proposed fully franked dividend of 3.0 cents per share announced by RHG on Monday, 8 July 2013.
As a result, RHG shareholders who are on the register for the record dates for each of the Scheme and the Dividend would receive cash payments totalling 49.0 cents per share. This is 1.9 cents per share higher than the amount such shareholders would receive under the scheme that was announced on Monday and under which a syndicate comprising Australian Mortgage Acquisition Company Pty Limited and RESIMAC Limited would acquire RHG.
Referring to the impact of this acquisition on the Pepper Group's Australian activities, Pepper’s group managing director and CEO Patrick Tuttle said the acquisition will be immediately earnings accretive for Pepper and will further expand its activities into select segments of the prime residential lending market.
"Prime residential lending is a natural extension to Pepper's existing range of lending products, which includes specialist residential mortgages, commercial auto loans and equipment leasing, and will better position us as a "one stop shop" product provider to our loyal broker and white-label distribution partners,” he said.
