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OSB/Charter Court merger makes funding sense

Shareholders in OSB would own 55 per cent of the enlarged share capital
March 14, 2019

OneSavings Bank (OSB) and Charter Court Financial Services (CCFS) are in talks for an all-share merger, which the lenders hope will diversify their funding sources and strengthen product distribution. Under the terms of the deal, OSB shareholders would own 55 per cent of the enlarged group’s share capital, with the buy-to-let specialist’s chief executive, Andy Goulding, taking the helm. Charter Court shareholders would receive 0.8253 new OSB shares for each Charter Court share. 

IC TIP: Hold at 399p

The boards said the tie-up would create a “leading specialist mortgage lender in the UK with greater scale and resources to deploy on growth opportunities” and “leverage complementary strengths to create a comprehensive and diversified platform across product capabilities”.

Both Charter Court and OneSavings Bank – which is due to report 2018 trading figures on 14 March – have specialised in the professional and portfolio buy-to-let market, where demand has proved more resilient since the increase in stamp duty land tax on second homes in 2016 and the withdrawal of mortgage interest tax relief a year later.