CBA could retain a substantial chunk of the merged business
Online mortgage broker Lendi seems to have paused its initial public offering plans, even as Commonwealth Bank is pushing to complete a merger between Lendi and Aussie Home Loans before Christmas.
Lendi’s pause on its IPO comes as market sources say it is hoping to achieve a price equating to 10 times its annual revenue, according to a report by The Australian. Lendi, part-owned by Macquarie Group and ANZ Bank, has been running a dual-track process for a sale and an IPO.
It was expected that Lendi would be worth between $500m and $600m when listed, and that it would raise about $100m with a primary raise of about 80% and a 20% selldown. Lendi has about $40m in annual revenue and a 60% gross profit margin, The Australian reported.
Lendi launched in 2013, and is a leader in the online mortgage market, with a market share of about 90%. Its website says that it has facilitated direct home loan settlements of more than $12bn since its founding. The online lender was touted as an ASX listing candidate prior to the outbreak of COVID-19.
The company has also been in talks with Commonwealth Bank to potentially buy the bank’s Aussie Home Loans business. CBA is reportedly asking Lendi to pay about $500m for Aussie, The Australian reported. CBA is reportedly putting final touches on the deal.
The transaction will reportedly include CBA continuing to fund loans under the Aussie brand, while the combined group will be led by Lendi head David Hyman, according to The Australian. Aussie will continue to operate as a separate brand.
CBA is eager to shed its exposure to mortgage broking. However, the deal currently being proposed would let the bank retain a 45% stake in Aussie, with a 55% stake going to Lendi.
