RHG shares surge after Resimac bid

Non-bank lender Resimac has made a bid to acquire the remnants of mortgage firm RAMS in a joint proposal with former Babcock & Brown banker Trevor Loewensohn.

Non-bank lender Resimac has made a bid to acquire the remnants of mortgage firm RAMS in a joint proposal with former Babcock & Brown banker Trevor Loewensohn.

The conditional proposal values the target, RHG Mortgage Corp, about $130 million. RHG shares surged 9.5 per cent to 41¢.

Resimac tried to buy RHG's loan book earlier this year but that bid failed because the price was too low.

Under the latest proposal, Resimac and Australian Mortgage Acquisition Company (AMAC), an entity formed by Mr Loewensohn, are offering 41.5¢ for each RHG share plus 1.5¢ a share in franking credits.

RHG's main asset is the lending book of RAMS, which was a competitor against the big banks before the global financial crisis.

In 2007, the RAMS branch network and brand was sold to Westpac for $140 million.

RHG is now running down its mortgage book but is not making any new loans. It announced a $40.7 million profit last year.

RHG said the directors were assessing the proposal and would keep the market updated.

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