Mortgage brokerage tycoon Mark Bouris has broken his silence over the collapse in the share price of his company Yellow Brick Road – and revealed he wants to merge with a major competitor.
Famed contractor Yellow Brick Road’s share price has fallen to just five cents, a huge drop from 70 cents less than a decade ago and $1.10 when it listed on the ASX in 2008 .
The apparent stock market bloodbath has drawn criticism – but Mr Bouris argued to the Daily Mail Australia on Monday that the share price was not a reflection of his company’s cash position, but of accounting rules of the stock market.
Mr Bouris told Daily Mail Australia the share price collapse reflected the fact four major groups now owned Yellow Brick Road, which was not the case 15 years ago.
“Just in terms of strategy, why is the stock price low, very low?
“When we first listed, we had very few large shareholders on the register.
“Just me and NEC – what became known as Nine Entertainment Corporation.”
Mortgage brokerage tycoon Mark Bouris (pictured with model Monika Radulovic) has broken his silence over the collapse of his company Yellow Brick Road’s share price – and revealed he wants to merge with a major rival.
Bouris’s company is now one of four major investors owning 75 percent of Yellow Brick Road, alongside Nine Entertainment Corporation, hedge fund Magnetar Capital and Sandon Capital Investments.
The entrepreneur’s Mark Bouris Family Company Investments owns just under 20 per cent of Yellow Brick Road and wants to merge with Aussie Home Loans, founded by now-retired John Symond.
Mr Bouris argued that with four shareholders controlling three-quarters of the company’s 330 million shares, it was difficult for anyone to acquire shares in the company, leading to lower demand for shares. ‘actions.
“The stock price depends on who can buy a large number of shares, or bid on a large number of shares, based on what is available for sale,” he said.
“The stock price reflects supply and demand and the supply of new securities, what they call liquidity. The supply of securities is limited, so you cannot purchase any.
“If you’re a buyer, you’re never going to be able to bid high enough, you’re never going to be able to pay enough to get enough inventory for it to be valuable to you.”
Mr Bouris, a former host of Celebrity Apprentice, said a delisted company would be more attractive to private equity firms, arguing they could more easily increase their stake.
“There are a lot of private equity groups,” he said.
“And probably unlisted, it would be more interesting for us to be listed because private equity generally doesn’t want to be in listed environments anyway.
“It removes a lot of hurdles, but I’m not talking at this point to a private equity group about buying us out.”
While Yellow Brick Road reported a loss of $3.5 million in the year ended June 30, Mr Bouris said this reflected rising rates reducing the value of its brokered loans and depreciating its profit underlying before taxes, which was still positive at $436,000.
“When interest rates rise, you can lend less – you lend less money to more people, which means your portfolio size minus repayments, your portfolio will shrink,” he said.
“What you need to do is make an adjustment to your profit for the reduction in the value of your book.
“It doesn’t mean anything other than it’s an accounting standard that you have to adhere to.”
The entrepreneur’s Mark Bouris Family Company Investments owns just under 20 per cent of Yellow Brick Road and wants to merge with Aussie Home Loans, founded by John Symond (pictured right with his wife Amber).
The Yellow Brick Road share price has fallen to just five cents, a considerable drop from 70 cents less than a decade ago and $1.10 when it listed on the Australian Securities Exchange in 2008.
Mr Bouris argued delisting from the ASX would make it easier for the big four investors to raise capital, arguing the value of its mortgage portfolio was worth three times more than its $18 million market capitalization.
“In monetary terms, we are making money,” he said.
“What we receive, less what we spend each month, on an annual basis, we make money. We turn over a lot of dough.
Mr Bouris also revealed he would like to merge or take over companies like Aussie Home Loans, which bought Wizard in 2015.
“I’m more interested in making us bigger and expanding,” he said.
“This would be done by acquisition ourselves or by merger.
“It’s probably more interesting for me and for the shareholders than doing something else.”
Yellow Brick Road bought Resi Mortgages for $36 million in 2014 and Mr Bouris would like to explore the idea of a merger with Aussie Home Loans, which merged with Lendi in 2021, a mortgage broker part-owned by the Commonwealth Bank .
“If Aussie wanted to merge, I would certainly be interested in talking to them,” Mr Bouris said.
“If they told me they would be interested in merging Aussie and Yellow Brick Road, I think it would be a match made in heaven, I would love to do something like that, and/or other brands that would like do it. something.
“Merge with another big brand: There are a few big brands that need to get bigger.
“In this industry, you either expand or you leave.
“We’re one of the big four, so anyone below us either has to get out completely or sell or expand, buy something else.
“We would be interested in doing something again in the future.”
“I’m just preparing us strategically so that all shareholders get better value in the future.
Mr Bouris founded Wizard in 1996 with the help of future media and casino billionaire James Packer, at a time when non-bank lenders were rapidly making inroads into the Australian mortgage market.
Wizard Home Loans was sold to GE Money in 2004 for $500 million, helping Mr Packer achieve a windfall that increased his value, following a disastrous investment with OneTel that lost him $1 billion altogether with future media mogul Lachlan Murdoch in 2001.
Mr Bouris founded Wizard in 1996 with the help of future media and casino billionaire James Packer (pictured in 2008 with his wife Erica Baxter) at a time when non-bank lenders were rapidly making inroads into the Australian mortgage market .
Mr. Bouris and Mr. Packer are still friends, with the executive chairman of Yellow Brick Road still sending him Christmas and birthday cards.
But he’s not sure he wants to invest in Yellow Brick Road Holdings.
“I talk to him, I check on him, I see how he’s doing,” Mr. Bouris said.
“Send him Christmas (cards), birthdays and that sort of thing when he’s in town.
“Is it possible that he wants to reinvest in the company? I don’t think so, not at this point.
“I certainly haven’t brought it up with him.”
Yellow Brick Road shareholders will get a vote on the matter at an annual general meeting on October 24.