Bendigo puts Homesafe on the block but no one is biting
Regional banking player Bendigo and Adelaide Bank has been seeking to offload a key unit, its $950 million Homesafe business, Street Talk can reveal.
It is understood the $5 billion regional lender held formal discussions with strategic parties and buyout funds, including Macquarie Bank and private equity giant KKR. Greenhill & Co duo Chris Collett and Chris Smith have been advising the bank on the transaction.
Bendigo Bank’s Homesafe program allows a retiree to cash in some proportion of the value of their house without going into debt. Eamon Gallagher
But while potential acquirers are said to remain interested, sources said there was a significant mismatch in price expectations, particularly around a key valuation metric.
Buyers are on board with the lender’s forecasts for property price appreciation, mortality rates and the like, sources said. However, sources said it was the discount rate the bank was applying that blew up discussions. In the buyers’ view, the price was inflated as it did not reflect the true cost of capital in a rising interest rate environment.
A spokesperson for Bendigo declined to comment when contacted by Street Talk on Wednesday.
Bendigo’s Homesafe program, created in 2005, allows a retiree to cash in a proportion of their house’s value without going into debt. Bendigo, through the Homesafe Trust, buys a share of the future sale proceeds of the house. The bank stands to benefit from any future property value increases when it is sold, making Bendigo a property investor in its own right.
The product has proved popular, resulting in significant growth in the portfolio. Homesafe’s total investment portfolio has been steadily revalued upwards since 2020, rising from $779 million in June 2020 to
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