Update to stated post-offer intention statements with regard to Charter Court Financial Services Group plc
LEI: 213800WTQKOQI8ELD692
THE FOLLOWING ANNOUNCEMENT IS BEING MADE PURSUANT TO THE REQUIREMENTS OF RULE 19.6(B) OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE"), WHICH, INTER ALIA, REQUIRE A PARTY TO AN OFFER, SAVE WITH THE CONSENT OF THE PANEL ON TAKEOVERS AND MERGERS, TO PROMPTLY MAKE AN ANNOUNCEMENT SHOULD IT DECIDE TO TAKE A COURSE OF ACTION DIFFERENT FROM ITS STATED INTENTIONS DURING THE PERIOD OF 12 MONTHS OR SUCH LONGER STATED PERIOD FROM THE END OF THE OFFER PERIOD EXPLAINING ITS REASONS FOR DOING SO.
OneSavings Bank plc (“OSB”)
Update to stated post-offer intention statements with regard to
Charter Court Financial Services Group plc (“CCFS”)
OSB announces that, further to the completion of its recommended all-share combination with CCFS, which was effected by way of a scheme of arrangement between CCFS and its shareholders under Part 26 of the Companies Act 2006, on 4 October 2019 (the "Combination"), due to a commercial opportunity, its Board of Directors has decided to take a course of action which differs from the statements of intent made pursuant to Rules 2.7(c)(iv) and 24.2 of the Takeover Code (the "Stated Intentions"), as set out in its announcement of 14 March 2019 and the scheme document published on 15 May 2019 (together, the "Offer Documentation").
Reasons for the modification to the Stated Intentions and action to be taken
As set out in the Offer Documentation, OSB expected to maintain all of the current locations of the enlarged group comprising the OSB group and the CCFS group following the completion of the Combination (together, the "Combined Group"), besides consolidating the existing London premises to a new premises in London, and to retain and operate the lending brands of both OSB and CCFS (including OSB’s second charge residential brand, Prestige Finance (“Prestige”)).
OSB has determined that a modification to the Stated Intentions is required in relation to OSB’s locations and the Prestige brand as a result of a highly attractive and unsolicited commercial opportunity that has arisen for OSB to sell Prestige House, Bushey, Hertfordshire (“Prestige House”), which is the principal place of business of Prestige. The attractiveness of this opportunity means that OSB now intends to sell Prestige House. As a result of this sale and the operational capacity available (or which can be created) in other OSB existing locations, OSB now intends to create a ‘Centre of Excellence’ for second charge lending by migrating the existing business of Prestige to Wolverhampton and to discontinue the Prestige brand for new lending. The second charge loan book serviced under the Prestige brand was broadly flat against the financial year ended 31 December 2018, with a gross value of £372.8m as at 30 June 2019 (31 December 2018: £368.0m).
Where possible, OSB will seek to review opportunities to reallocate staff from discontinued roles arising from the disposal of Prestige House and the operation of the Prestige brand to other appropriate roles, including those being created from organic growth. However, the intended actions outlined in this announcement are likely to have an impact for those employed in Prestige House and by the Prestige brand. OSB confirms that the employment rights, including pension rights, of all such employees will be fully safeguarded.
Alan Cleary, Group Managing Director of Mortgages at OSB, said, “The attractive offer for Prestige House has led us to consider this proposed restructure which, we believe, would enhance the overall second charge loan proposition.”
Alan continued, “We are actively engaging with our key intermediary partners on this proposal to ensure minimal disruption. We are also consulting with our colleagues at Prestige Finance who are directly impacted by this proposal to ensure they receive the support they need.”
These modifications do not impact OSB’s fundamental rationale for the Combination, nor are they expected to impact on the business or prospects of the Combined Group.
Following the successful completion of OSB’s combination with CCFS on 4 October 2019, OSB is in the early stages of integrating the two businesses and remains focused on delivering shareholder value as it executes on the strategy for the enlarged Group.
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Contacts:
| Robert Gurr OneSavings Bank plc Public Relations T: 01634 821249 E: | Eleanor Ross Teamspirit PR T: 020 7861 3841 E: | Alastair Pate OneSavings Bank plc Investor Relations T: 01634 838 973 E. |
Notes:
About Precise Mortgages
Our mission is to broaden the criteria for mortgage approval to support home owning aspirations and buy to let entrepreneurialism. Our award winning, technology driven underwriting and credit risk management processes mean we can be more expansive in our mortgage approvals – serving those underserved by mainstream lenders.
Precise Mortgages was established in 2010, free of the legacy of poor decisions made pre-financial crisis, Precise Mortgages, delivers innovative products for residential mortgages, buy to let mortgages, bridging finance and second charge loans through a nationwide intermediary base.
About OneSavings Bank plc
OneSavings Bank plc began trading as a bank on 1 February 2011 and was admitted to the main market of the London Stock Exchange in June 2014 (OSB.L). OSB joined the FTSE 250 index in June 2015. OSB is a specialist lending and retail savings group authorised by the Prudential Regulation Authority, part of the Bank of England, and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (registered number 530504). The Bank acquired Charter Court Financial Services Group Plc (CCFS) and its subsidiary businesses on 4 October 2019.
OSB primarily targets underserved market sub-sectors that offer high growth potential and attractive risk-adjusted returns in which it can take a leading position and where it has established expertise, platforms and capabilities. These include private rented sector Buy-to-Let, commercial and semi-commercial mortgages, residential development finance, bespoke and specialist residential lending, secured funding lines and asset finance. OSB originates organically through specialist brokers and independent financial advisers. It is differentiated through its use of high skilled, bespoke underwriting and efficient operating model.
OSB is predominantly funded by retail savings originated through the long established Kent Reliance name, which includes online and postal channels, as well as a network of branches in the South East of England, and through its Charter Savings Bank brand. Diversification of funding is currently provided by securitisation programmes, the Bank of England Term Funding Scheme and Index Long-Term Repo operation.
