“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 MortgageBrokerNews.ca. “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 MortgageBrokerNews.ca 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 MortgageBrokerNews.ca.
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.