REA proposes $244 million takeover of Mortgage Choice

REA proposes $244 million takeover of Mortgage Choice

REA Group CEO Owen Wilson.

The operator of Realestate.com is looking to buy the entirety of Mortgage Choice (ASX: MOC) for $244 million - a move that would give the company its own mortgage broking business.

Proposed by Melbourne-based REA Group (ASX: REA) today, the takeover would see leading mortgage broker MOC brought under the real estate listings giant's umbrella which includes Realestate.com and Flatmates.com.

REA's offer of $1.95 per MOC share represents a 66 per cent premium for Mortgage Choice securityholders based on the company's share price at the close of trade on Friday.

Since the announcement, shares in MOC have jumped 61.7 per cent to $1.90 per share, while REA shares have fallen slightly. 

With more than 500 brokers, 380 franchises, and a loan book of $54 million, MOC is an exciting acquisition target according to the real estate listing group's CEO Owen Wilson.

"The acquisition of Mortgage Choice represents an exciting opportunity for REA to create a leading broking business," says Wilson.

"It builds on our success to date, accelerating our financial services strategy while leveraging our existing strengths and capabilities."


RELATED: Melbourne's Top Companies revealed


While the proposal is still subject to Mortgage Choice shareholder and court approvals, REA has already cleared one major hurdle after MOC's board unanimously recommended the takeover.

"This is a fantastic choice for Mortgage Choice," MOC chairman Vicki Allen said.

"Joining the REA network creates a significant opportunity to leverage its deep digital capabilities and expertise, combined with access to a large and engaged customer audience.

"It further establishes Mortgage Choice as one of the leading broking groups in Australia and will enable Mortgage Choice to operate at greater scale with an improved service offering to brokers and customers."

The transaction is expected to be funded by an increase in REA's syndicated debt facilities.

REA says its existing $170 million syndicated debt facility, due to expire in December 2021, will be partially refinanced as part of the takeover process.

Shares in REA are down 1.91 per cent to $137.38 per share at 11.45am AEDT.

Never miss a news update, subscribe here. Follow us on LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Crypto staking: a new way to earn passive income
Partner Content
You may be familiar with traditional ways of earning passive income such as trading sto...
Etoro
Advertisement

Related Stories

Cannon-Brookes launches shareholder campaign against AGL demerger

Cannon-Brookes launches shareholder campaign against AGL demerger

Australian billionaire and Atlassian co-founder Mike Cannon-Brookes...

Action film The Fall Guy starring Ryan Gosling to inject $244m into the Australian economy

Action film The Fall Guy starring Ryan Gosling to inject $244m into the Australian economy

The Australian economy is expected to receive a $244 million inject...

CVC finds Brambles takeover un-pallet-able, exits talks

CVC finds Brambles takeover un-pallet-able, exits talks

Just one day after reusable pallet, crate and container company Bra...

Square Peg and Blackbird invest $5m in digital business card start-up Blinq

Square Peg and Blackbird invest $5m in digital business card start-up Blinq

With traditional business cards on the brink, the world's predo...