Earlier this month, Liberty snagged a 10.1% stake in Mike Pero Mortgages (MPM) for $1.10 a share after a stand in the market.
New Zealand Finance gained 55% of MPM for 82 cents a share after a takeover bid last year. In late January, it launched a second takeover bid for the minorities priced at $1.05 a share.
While NZ Finance’s offer isn’t conditional on passing the 90% threshold which would allow it to compulsorily acquire the remaining shares, managing director John Callaghan has made it clear he would prefer not to incur the costs of keeping MPM listed - New Zealand Finance is also a listed company.
"If being a public company is a distraction and not a benefit to the company then take it private. There's no reason why we can't vote to take the company private," Ma says.
"That may be the direction further discussions lead. It's what's going to be in the best interests of not only Mike Pero the business but also its valued network of franchisees."
While there are downsides, including costs, in being a public company, there are also benefits including providing greater comfort to MPM customers, Ma says.
Liberty already sells its non-conforming mortgages through MPM and through New Zealand Finance's mortgage broking arms, New Zealand Mortgage Finance and Approved Mortgage Brokers.
"We have a good relationship with both companies," Ma says. Liberty sees MPM as a "very durable" business which has been further strengthened by New Zealand Finance's involvement and Liberty can "bring some enormous value to the enterprise," he says.
This isn't the first time Liberty has taken such a stake in a "business partner" and it has a number of similar relationships in Australia and it is speaking to several in New Zealand at the moment, Ma says. He wouldn't disclose which other businesses Liberty has stakes in.
"We're just looking at ways our partners can grow and accelerate their businesses. We're always considering more," Ma says. Liberty is positive on the future of mortgage broking and "what better way to support it than by putting your own capital alongside the companies you work with."
It isn't important for Liberty to have control in such situations, he says. While Callaghan has said he expects Liberty to seek a seat on MPM's board, Ma says that isn't a major objective.
