Wizard Up For Sale After Losing Magic

The Australian:

Struggling mortgage lender Wizard Home Loans will be put up for sale this week just days after the corporate watchdog rebuked owner GE Money over its debt collection and insurance business practices.

The Australian understands that GE Money – a subsidiary of New York Stock Exchange-listed giant General Electric – will announce the sale on Wednesday at the NSW state franchisee meeting in Parramatta, Sydney.

The proposed sale comes as Wizard’s founder and current chairman Mark Bouris, and his brother Adrian Bouris, seek to take control of the lender just four years after selling it and the Australian Financial Investments Group to GE Money for an estimated $500 million.

Mr Bouris is believed to have asked GE to pay him millions of dollars upfront to run the business – plus a stake in the company – so he can sell it at a later date. It is a move that could make him a second fortune.

The bid by Mr Bouris to take back control of the company echoes Kerry Packer’s famous deal with Alan Bond in which he sold the Nine Network to Mr Bond for $1.05 billion and bought it back three years later for $250million.

GE is believed to be attempting to avoid having to strike a deal with Mr Bouris by finding an alternative buyer this week.

The sale, coming in the wake of tougher trading conditions sparked by the global credit crisis, is expected to generate a fraction of the money GE paid a group of shareholders, including James Packer and Mr Bouris, in 2004, for Wizard and AFIG. It signals further consolidation in the banking sector, with interested parties expected to include Westpac, which bought RAMS Home Loans last year for $140million, National Australia Bank, Wizard’s chairman, Mr Bouris, and possibly Challenger Financial Group, of which Mr Packer has a 20 per cent stake.

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