NAB Loses Out In Race To Acquire Wizard Home Loans

Post by Sharat on December 24, 2008 · Under Company News, Mergers & Acquistions, banking, home loans, mortgages · Comment

Commonwealth Bank of Australia, together with Aussie Home Loans announced today that they were the preferred buyers for Wizard Home Loans, having beaten rival National Australia Bank in the race to acquire the non-bank lender from its parent GE, embarrassing NAB who only last week said it was in the lead and would close the deal.

CBA said it will buy up to $4 billion of mortgages originated by Wizard Home Loans, while Aussie Home Loans in which CBA holds a 33 per cent stake said it will purchase the Wizard brand and distribution network for an undisclosed sum from Wizard parent company GE Money.

CBA will acquire $2 billion of mortgages at the end of February 2009. Discussions relating to purchase of the additional $2 billion are continuing.

NAB last week said that it was in the advanced stages of acquiring the brand and distribution network of Wizard and also said that is planned to purchase A$ 4 billion in prime mortgages originated by the non bank mortgage lender. NAB has confirmed its offer for Wizard has been rejected and said that talks with the mortgage lender have concluded.

Aussie Home Loans executive chairman John Symond said his company began considering a move on Wizard in recent weeks after it approached GE Money and learned a deal with NAB was not “signed, sealed and delivered”.

“We threw everything at it in world record time and came up with the goods,” Mr. Symond told Dow Jones Newswires. Mr. Symond declined to provide any details on the amount Aussie will pay for its part of the deal. He did say however that Aussie will continue to consider further acquisition opportunities.

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