Owners of Latitude Financial are planning to raise between $1.25bn and $1.4bn through an initial public offering of the non-bank lender, as the market braces for the release of its prospectus on Thursday.
It is understood the company’s market value will be will be priced between $3.6bn and $4bn, while shares will be sold at between $2 and $2.25 each.
Investors will have the opportunity to secure a dividend yield of between 4.7 per cent and 5.2 per cent with the $1.25bn-plus selldown, as revealed by DataRoom online on Wednesday.
Working on the float are Macquarie Capital, Goldman Sachs and UBS, while the co-lead managers include Ord Minnett, Crestone, Wilsons and Morgans.
It is understood the company has priced the deal at close to $4bn after securing demand to list at that value.
The business is expected to be listed late next month or in November.
Analyst research for Latitude started hitting the desks of fund managers last week, with Macquarie Capital expecting the business to be worth between $2.59bn and just over $4bn.
Latitude’s cash net profit for the year to June 2020 is expected to be $288m and represents a growth of 8 per cent on the previous corresponding period.
Goldman Sachs said it expected the annual net profit to hit $288m, based on the growth rate on the previous corresponding period of 7 per cent, saying global comparative companies traded between 9 and 15 times net profit.
Latitude is owned by Kohlberg Kravis Roberts, Deutsche Bank and Varde Partners, and is made up of the assets of the former Australian GE Capital consumer business, which was acquired by a consortium in 2015 for $8.2bn, including debt. The owners will sell down 50 per cent.
Run by Ahmed Fahour, the business offers consumer finance through services such as personal loans, credit cards, car loans, personal insurance and interest-free retail finance.
It is the second-largest non-major bank player in the non-housing personal lending market.
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