Sesame Bankhall closes in on mortgage network sale

LSL Property Services is nearing the final stages of takeover talks with Friends Life to secure its bid for Sesame Bankhall Group’s mortgage network, it is understood.

Sources close to proceedings said that after more than 15 months of negotiations, LSL could be close to signing on the dotted line.

It is understood the LSL bid would be to buy Sesame’s appointed representative mortgage network in a deal that would see this division split from directly authorised mortgage club PMS and compliance services business Bankhall.

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LSL Property Services made an £17.1m pre-tax profit for the year ended 31 December 2013 and could be in a cash-rich position later this month after confirming its intent to sell a proportion of its shares in Zoopla following the £1bn initial public offering of the property website, due in late June.

In May, in an interim management statement, LSL said: “The group has a strong balance sheet and is extremely cash generative. The business is well placed to increase shareholder value by driving benefit from operational gearing in the growing market with potential additional benefit from selective acquisitions.”

Last year, SBG was hit by a £6m fine from the FCA for failing to ensure the advice it gave was suitable on Keydata recommendations and over broader systems and controls weaknesses.

Right to reply

In a joint statement a spokeman for Friends Life and Sesame said: “We do not comment on market rumour and speculation.”

Jon Round, group financial services director, LSL Property Services, said: “LSL does not comment on market speculation. LSL has a strong track record of delivering acquisitive growth and is well known, however, for looking at opportunities to acquire companies that provide a complementary mix to its existing businesses should the right opportunity be available.”

Analyst view

Abid Hussain, equity analyst at Societe Generale, said: “We would welcome a disposal that enhances the value of the rest of the Friends Life group. Sesame has been loss-making under the group’s ownership and riddled with potential regulatory issues.”