Pepper adds RHG spice
Investors are betting Resimac will raise its takeover bid for mortgage firm RHG after Pepper Australia launched a rival offer for the company previously known as RAMS.
Two days after RHG urged its shareholders to support a 44.1¢-a-share takeover bid from Resimac, Pepper swooped with an offer of 46¢ a share for the business on Wednesday.
Under the latest proposal, RHG shareholders would receive a total of $142 million for the company - while RHG is also set to pay a separate dividend of 3¢ a share.
In afternoon trading on Wednesday, some shares changed hands at 50¢ - indicating some investors expect Resimac to come back with a higher bid for RHG. The stock closed at 49¢, in line with the latest bid plus the dividend payment.
Wilson Asset Management, which owns 3.37 per cent of RHG after upping its stake in recent days, welcomed the prospect of a "bidding war" for the company.
"When two people want an asset, who knows where the price goes? It's going to go to the highest bidder," chairman Geoff Wilson said.
RHG's main asset is the lending book of RAMS, which was a competitor of the big banks before the global financial crisis.