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(December-2002) Super friends planning to pick up other half of Members Equity
A syndicate of super funds looks set to buy the half of financial services group Members Equity that it doesn’t already own from AXA Australia for $95 million.
This has been confirmed by Garry Weaven, executive chair of Industry Fund Services (IFS). IFS is the trustee of the trust that already holds the 50 per cent share in Members Equity that the syndicate bought from AXA two years ago. The trust is owned by 43 super funds which will now be offered additional units so that the other half of Members Equity can be purchased from AXA.
Weaven says the deal took some time to negotiate. “We made the approach to AXA and are satisfied with the result... We want to close the deal before Christmas and the indications that we will are positive.”
“The relationship with AXA has been quite good and worked pretty well at board level,” he says, adding that the deal was struck before AXA’s new CEO Les Owen came on board.
“It isn’t a normal business strategy of his, I think, to have a 50:50 joint venture. It isn’t normal for us either,” Weaven says, noting that the trust made it known at the time it purchased its initial half share that it would prefer full control.
He says: “We believe that this is a reasonable investment and the prospects for excellent returns are reasonably good, but equally, that this is a strategic initiative and needs to be seen as a strategic investment by funds.
“Members Equity is a small bank but probably the fastest growing bank in Australia.” It grew out of Super Member Home Loans (SMHL), which currently has around $7 billion in loans on its books. Since obtaining a banking license last year, Members Equity has launched a savings account and a credit card. And according to Weaven, it will soon also offer a personal loan product to members of super funds.
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