As shareholders in Judo Bank offloaded $131m of stock in a block trade on Wednesday night, the $2bn lender remains on investors minds for other reasons.
With Scottish Pacific up for sale through Goldman Sachs by Affinity Equity Partners, market experts believe Judo Bank would be one of the most logical buyers.
Another would be its regional banking rivals, such as Bank of Queensland or Bendigo Bank.
Bank of Queensland would unlikely be in a position to embark on a transaction given recent challenges, but for the other two names, it makes sense.
The problem, though, is the price. DataRoom has learned that the asking price for Scottish Pacific is $1.5bn – one thought to be far outside the price range for both Judo and Bendigo Bank, which trade on lower multiples than what Scottish Pacific would be selling at.
And while it may be a nice to have, it wouldn’t be seen as an essential deal to do. Based on that, it probably points back to the members of the private equity community that would be the most likely buyers.
Scottish Pacific is run by former Bank of Queensland boss Jon Sutton and was purchased by Affinity in 2018 for $630m.
It has more than doubled the group’s loan book to $2.1bn in the past five years, and tripled its customer base in that time.
Affinity was said to have paid about 19 times Scottish Pacific’s profit when it was purchased, but that was in a different market.
ScotPac has funded $23.9bn annually over 35 years, offering trade, asset, invoice finance and business loans.
It was floated in mid-2016 with a market value of $440m through Citi and Goldman Sachs. At that time it had annual revenue of $108.6m.
Meanwhile, Bain Capital and Singapore sovereign wealth fund GIC offloaded shares in Judo on Wednesday night, with the 71.6 million shares offered at $1.83 to $1.89 in a book build.
The price was a discount of between 4.2 per cent and 1 per cent to the last traded share price of $1.91 on Wednesday.
Working on the deal was investment bank Goldman Sachs.
The stake equated to 6.4 per cent.
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