New details on CFF bid revealed

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The lender currently courting Canadian First Financial in an effort to win CFF Bank is assuring brokers they figure prominently into its plans if a deal is approved.

“Westbridge's current business of originating (commercial) and residential mortgages depends almost entirely on brokers,” JD Diabira, chief executive officer of Westbridge Structured Mortgage Corp. told “That will be expanded to include the residential brokers of the CFF retail centres network.”

Westbridge, chaired by James Clayton, founder of CFF Bank forerunner, officially announced its intent to acquire CFF Bank Monday, after speculation that the Ottawa-based lender was planning a last minute offer.

The offer includes a $12 million initial cash injection and ensures existing shareholders maintain a majority stake, according to a release.

“Westbridge’s investment envisions a differentiated lending strategy that focuses on underserved segments in the commercial and residential mortgage lending space, in keeping with the company’s executives’ heritage and background,” says Westbridge in a release. “The company will bring a renewed focus on loan-pricing, risk management and solid traditional credit underwriting policies and practices.”

CFF Bank come to the table only after Home Capital Group Inc. got its own purchase offer before the CFF board and its stakeholders. Diabira told Monday that that deal had been approved but not closed. Neither CFF nor Home Capital could be reached for comment Friday.

Westbridge is now expanding on the situation.

“Our proposed investment is designed to help avoid a lengthy proxy battle that may erode the bank’s capital base and shareholder value. It is in shareholders’ best interest that the Board of Directors gives serious consideration to it,” James Clayton said in a release. “Ours provides both a higher valuation and superior returns in the coming years. We believe the CFF shareholders will respond favourably."

For their part, brokers – especially those who currently operate CFF Centres -- are patiently awaiting more details.

“It’s too early, but from what I’ve read they want to keep the CFF Centres and the distribution channel, so it would be good for our company to be able to keep that and of course to be able to have a partner that has some deeper pockets,” Roy Singh of Centum Discount Mortgage and the operator of a CFF Centre told
  • Alberta bound on 2015-08-31 6:42:22 PM

    How long will a 12 million infusion last...according to public records the Last quarter was around a loss of over 5 million if I am not mistaken. So what happens in 6 months ?

  • Anthony on 2015-08-31 6:59:49 PM

    Shareholders crazy not to accept home capital offer

  • Walid Hammami on 2015-08-31 10:00:21 PM

    Wow, seems like I was right (I commented on a recently CAAMP acquired blog :) )

    That's the right play from Westbridge (with maybe a few tweaks).

    Hopefully their management will have a vision, because if they play their cards right they could be the positive disruption that the industry needs.

  • Mark on 2015-09-04 3:12:53 PM

    i wonder why CFF would go with HT....
    on the face of it it seems like the westbridge offer is a much better value.....
    there may be a risk there in that osfi may not approve it....

    but i'd suspect bank regulators would rather have to manage a small-bank risk/problem than bring a behemoth like home trust into the banking system......especially given HT's recent (and past) regulatory problems....
    it's a much higher systematic risk, and i don't think these regulators are as dumb....

  • Stephanie Lopushinsky Gotobrokers on 2015-09-06 2:08:53 PM

    Have they negotiated the trailers owed to Brokers for their past loyalties to Moncana then CFF and now?

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