MCB Finance, an AIM-listed consumer finance company that is 26 per cent owned by Dermot Desmond, has received an acquisition approach from International Personal Finance (IPF).
Founded in 2006, MCB offers flexible loans to consumers in Finland, Latvia, Lithuania and Australia under its Credit24 brand.
Shares in MCB went from 50p to 80p on the news, valuing the company at £9.29 million (€11.7 million).
The company notified shareholders of a cash offer to buy the business by IPF, a FTSE 250-listed home-credit business with a market capitalisation of £1.1 billion on November 18th.
IPF, which has operations in eastern Europe and Mexico, said the proposed acquisition of MCB would "accelerate the development of IPF's digital lending business".
Footprint
“In addition, it would increase IPF’s geographical footprint with a proven business model in a manner that is consistent with IPF’s declared strategy,” IPF added.
The board of MCB, which is chaired by veteran venture capitalist Dr Anton Mayr, said it was "engaged in preliminary discussions with IPF, and further announcements will be made as appropriate".
MCB said as the acquisition approach was only preliminary it planned to continue “refinancing discussions with principal shareholders, with bondholders and with potential new investors”.
It said these discussions had begun before the approach as the company hoped to do a new equity fundraising and refinance its senior and subordinated debt facilities before they mature on March 7th next year.
Mr Desmond has been a long-term investor in MCB via an investment company called IIU Nominees.
Since 2008 IIU has increased its stake in the business from 10 per cent to some 26.29 per cent.
Mr Desmond has a long history of successfully investing in financial services businesses, often with a technology edge.
He founded National City Brokers in Dublin in 1981 and is also a large shareholder in Latvian bank Rietumu Banka.
Credit facility
MCB said in a stock exchange announcement in 2012 that Rietumu provided it with a €17 million revolving credit facility.
“The relationship between the company and Rietumu is long-standing, the banking facility having been in place with Rietumu since September 2007,” MCB said.
