RHG shareholders urged to accept Resimac takeover bid

by Mackenzie McCarty10 Jul 2013

RHG shareholders are being urged to accept a takeover bid from non-bank lender Resimac, following 'several months' of talks between the two companies.

RHG consists of the remnants of mortgage firm RAMS, which was sold to Westpac in 2007.

The group’s board says it unanimously recommends a 44.1 cents a share acquisition proposal from Resimac and that it would pay a fully-franked dividend of three cents a share, regardless of whether the takeover bid is successful.

Resimac CEO, Allan Savins, wasn’t prepared to offer comment on the lender’s strategy at this stage, other than to tell Australian Broker that the he has high hopes for the potential takeover.

“This acquisition will not only help us grow our portfolio, but we can also leverage the size for process and funding benefits for new customers.”

If the bid is successful in gaining the shareholder support, the proposal and dividend payment would see the company valued at $145.3m, according to News Ltd, with total payments to shareholders of 47.1 cents a share.

So far, the outlook is positive, with reports early trade RHG shares rose 16% to 46.5 cents, which suggests investors expect shareholders to accept.

Resimac made an approach to buy RHG's loan book earlier this year, but that bid was rejected because the price was too low.