Wolverhampton-based Charter Court in talks over £1.6bn merger
A finance company employing around 600 staff is preparing for a merger worth £1.6 billion.
Wolverhampton-based Charter Court Financial Services Group is in advanced talks.
Buy-to-let mortgage specialist Charter Court and OneSavings Bank have confirmed the talks which they said would create a “leading specialist mortgage lender in the UK ” .
Charter Court is based at Broadlands, which is near the M54 end of the Stafford Road. It operates the Exact and Precise Mortgage brands.
The merger deal marks the latest stage in the remarkable growth of Charter Court.
It has four buildings on the business park, with the latest opening last November. The company employs around 600 people, mainly in Wolverhampton, and has grown from just 28 when it was formed in 2008.
Charter Court Financial Services Group, which was formed in 2008 and was listed on the London Stock Exchange in October 2017, saw pre-tax profits rise by 57 per cent in the six months to the end of June – up from £59.3 million a year before to £93.1m. It is due to release its full year figures for 2018 on March 20.
Its loan book stood at £6.2 billion at the end of September, up 27.4 per cent on the year. Customer deposits were up 14.1 per cent year-on-year to £4.5 billion.
On completion of the potential merger OneSavings Bank shareholders would hold about 55 per cent and Charter Court shareholders would hold about 45 per cent of the combined group.
If the deal goes ahead, Andy Golding, currently chief executive of Chatham-based OneSavings Bank, would become the boss of the combined group.
Under the proposed deal, OneSavings would acquire all the issued shares of Charter Court with 0.8253 new OneSavings shares exchanged for each Charter Court share.
OneSavings has until April 6 to announce that it intends to make an offer for Charter Court or that it does not intend make an offer. The deadline can be extended on request.
The potential merger comes as consolidation in the challenger banking sector steps up following CYBG’s acquisition of Virgin Money last year and FirstRand’s recent acquisition of Aldermore.
A host of challenger banks have emerged in recent years, such as Monzo and Starling, which are vying to take market share from the big high street banks.
If the OneSavings-Charter Court merger does go ahead it would depend on US activist investor Elliott Advisors, a major shareholder in Charter Court.
Chief executive Ian Lonergan said in November that Charter Court was continuing to see robust demand for its specialist lending proposition and see solid demand for its buy-to-let and specialist residential mortgages.