Last week it was announced that Nikko Principal Investments Limited, the majority shareholder of Mortgages plc, had entered into detailed negotiations with a global financial institution with the objective of selling Mortgages plc as a going concern. The sale would involve all the Mortgages plc Group companies including Genesis.
However, some industry figures believe that a number of the global institutions linked to the lender would not be interested in acquiring a network and could potentially sell it off.
Richard Griffiths, managing director of Network Data, said: “It all depends on who acquires Mortgages plc. But the rumoured front-runners, including Lehman Brothers and Citigroup, are known for only wanting to acquire assets. Where would this leave Genesis?”
Tony Jones, managing director at Pink Home Loans, commented: “Taking on a network could be seen as a potential risk by the buyer and could result in a level of uncertainty for the ARs. It may be difficult for Genesis to plan long-term.”
However Matthew Bright, managing director of Optoma said: “Genesis has such a strong brand name that even if it were to be sold there would be no shortage of high-profile buyers.”
Barry Robson, managing director at Genesis, said: “Genesis already has the support of the Mortgages plc Group and Nikko Principal Investments, but a sale to a global financial institution will underline and enforce the strength of our backing. This has to be good news for everyone. Since our acquisition, Genesis has remained an independent business and, as far as Genesis is concerned, this situation will continue.”
Sally Laker, managing director of Mortgage Intelligence, agreed with Robson’s comments. “We would assume that the buyer of Mortgages plc will be looking for distribution and Genesis could be a means to obtaining that distribution,” she said.
Laker also confirmed that Intelligence’s parent Close Brothers were not in the running to buy the lender.
Mortgages plc
Names in the frame
The industry gives their views on the front-runners rumoured to be acquiring Mortgages plc.
Lehman Brothers
John Mawdsley, director at The Mortgage Partnership:
“Lehman Brothers is already well-established in the market with its acquisitions of SPML and Preferred Mortgages. So you have to ask, why would it want to buy another sub-prime lender?”
Bank of Ireland
Bill Warren, network director at Complete Mortgage and Loans Limited:
“The ability for Mortgages plc to create new avenues of business and therefore more margins would fit well with Bank of Ireland. The tie-in that Mortgages plc has with Bristol & West, a division of Bank of Ireland, only further enforces the potential logic of the bank acquiring it.”
Countrywide
Ray Boulger, senior technical manager at Charcol:
“There has been suggestions Countrywide has been looking to buy someone. It would make more sense for a company like this to acquire Mortgages plc than some of the other big names being bandied around.”
Citigroup
Brian Pitt, director at Beacon Mortgages:
“Citigroup already acquired Future Mortgages two years ago to gain a distribution and technology platform in the sub-prime market so I don’t see what Mortgages plc can add to this.”
National Australia Bank (NAB)
Sally Laker, managing director of Mortgage Intelligence:
“It is a strong possibility as it is looking to build a distribution channel through intermediaries and has not delved into the sub-prime market thus far.”
GE
Bob Sturges, head of communications at igroup
“GE Commercial Finance already owns igroup and First National. It is unlikely it would want to buy Mortgages plc. I’m sure we would have been told about this if it were in the pipeline.”
