Resimac mulls offer for RHG

RHG, the remnants of mortgage firm RAMS, is in early-stage talks over a potential corporate deal with non-bank lender Resimac.

RHG had its shares placed in a trading halt on Monday pending an announcement relating to "a possible transaction", which market sources said involved Resimac.

In a sign the approach is in its early stages, the company said no deal had been concluded, and there was no assurance any transaction would take place.

The $143 million RHG was also the target of a takeover bid in 2011 by former chairman and founder John Kinghorn, one of the country's wealthiest men.

He has since sold his stake in the business.

Geoff Wilson, a fund manager invested in RHG who helped block Mr Kinghorn's tilt at the firm, said it was too early to assess any bid, but it would have to be "fully priced" as the business was still generating healthy profits and dividends.

RHG, which is running down its mortgage book but not making any new loans, made a $40.7 million profit in 2012.

"The company has decided not to go back into the mortgage market but it does have a very valuable mortgage system that someone may be able to utilise, so we would really have to see," Mr Wilson said. "It's too early to get caught up with price."

RAMS was a key competitor to the banks before the global financial crisis but its mortgage lending business was snapped up by Westpac in early 2008 after funding markets froze.

Before the halt, RHG shares were trading at 46.5¢.