U.S.- based asset managers Blackstone Group LP and TPG are drawing closer to acquiring British subprime mortgage lender Kensington, which is currently owned by the financial services provider Investec. The deal is considered a sign for increasing global investor interest towards the U.K. market.
According to Sky News, which first reported of the deal, the sale of Kensington is not finalized yet but the deal could be struck as early as this week. However, the acquisition could still be postponed for later in August or even be terminated.
Mr. Stephen Koseff, Chief Executive Officer of Investec, commented on the sale in a statement, which was cited by the Financial Times: “With the ongoing recovery in mortgage lending and wholesale funding markets we believe that Kensington is now well placed to continue growing and that this growth potential may be better realised under different ownership.”
The Anglo-South African financial services provider Investec took over Kensington in May 2007 at the price of 283 million pounds (473.03 million dollars) in cash and shares. Kensington had been specialising as a lender to home buyers with a poor credit history. Now, more than seven years after the company acquired Kensington, Investec has decided to dispose of it.
The Anglo-South African company started the sale process of Kensington in February 2014. Analysts have valued the mortgage lender at a price of between 200 and 250 million pounds. Mr. Koseff has been trying to make Investec more focused on banking and asset management by restructuring the company and making its operations simpler.
If the deal is finalized, it will provide both Blackstone Group LP and TPG with the opportunity to invest in the expansion of Kensingtons lending. Both the bidders and Investec refused to make any comments on the sale.
Blackstone Group LP fell by 0.98% on Friday in New York to close at $33.21 per share, marking a one-year change of 53.25%. The company is valued at $38.30 billion. According to CNN Money, the 14 analysts offering 12-month price forecasts for Blackstone Group LP have a median target of $40.50, with a high estimate of $44.00 and a low estimate of $35.00. The median estimate represents a +21.95% increase from the last price of $33.21.
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