Mystery surrounds reports that mortgage broker Mortgage Choice is set to purchase real estate agency LJ Hooker from finance group Suncorp Metway for up to $70 million.
According to a report from The Australian, Suncorp is close to selling the company for $70 million for the group. The report suggests this is a big decrease from the asking price of between $90 million and $110 million originally placed on the business last year.The lower price tag for LJ Hooker, which is the second-biggest commercial loan agency in Australia, is apparently a result of the weaker property market.
But some industry sources have cast doubt on the reports and Suncorp refused to comment.
“We do not comment on corporate activities, we don’t speculate on market speculation on corporate activities. LJ Hooker remains strategically important to Suncorp,” spokesperson Jamin Smith says.
Mortgage Choice also refused to comment. Spokesperson Kristy Shephard says it does not comment on market speculation, and that the company is in a market blackout before its 21 August results.
A number of companies are believed to have looked at LJ Hooker in recent months.
In March, John Symond of Aussie Home Loans flagged his interest. “It caught my attention because it’s a great franchise brand and has a great distribution potential,” he said at the time.
It has also been reported that mortgage broker AFG has looked at buying the business.
LJ Hooker differs from some other real estate groups, as franchisees pay a percentage of turnover to the parent company, with other real estate groups charging a monthly fee.
The rumour comes after Mortgage Choice announced a strategic partnership with life insurance broker Lifebroker last week, in what the company called a “diversification of our offering”.
The relationship between LJ Hooker and Suncorp has been a rocky one, with both companies’ chief executives resigning during March.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
