Veda Group chief Nerida Caesar says “positive” credit reporting is finally gaining traction in Australia, with 25 lenders now pouring millions of extra details on people’s credit histories into the credit bureau. NAB began sending extra data such as repayment history to credit bureaus in August. By the end of 2015, Ms Caesar said it and other contributors will begin accessing the new information to get a better picture of the riskiness of borrowers.
Veda and its investors have emphasised the value of comprehensive credit reporting to Veda in its argument to push US suitor Equifax’s first offer of $2.70 up to a non-binding offer of $2.825 a share for the company, implying an enterprise value for Veda of $2.6 billion.
“There are 7 million accounts with CCR records on the bureau, which represents 24 per cent of accounts in the retail credit market with CCR data loaded,” she told investors at its annual general meeting, its second after listing in December 2013. “We estimate the size of the overall credit market in Australia to be 30 million accounts. We are seeing the industry move beyond a wait-and-see approach to tangible progress towards CCR.”
A team from Equifax arrived in Australia this week to begin face-to-face questioning of Veda managers as part of a six-week due-diligence period. At Veda’s AGM, one investor asked chairman Helen Nugent whether there is anything that could derail Equifax’s offer or lead it to lower the price.
“It is inappropriate for me to comment, but they are undertaking due diligence at the moment and they will take a view as to whether they will undertake a binding proposal,” Dr Nugent replied.
Source: The Sydney Morning Herald
Update on Equifax’s offer to acquire Veda:
Back in the US Richard Smith, the CEO of Equifax, provided an update on Equifax’s offer to acquire the Veda during a recent Q3 earnings release call. He believes this opportunity is a nice strategic fit for Equifax. It expands Equifax’s geographic footprint in a core segment that we know very well. Veda has a strong market position, great products and data assets. They’re very profitable and would provide a strong management team in Asia.
Equifax’s strength in advanced analytics, enterprise growth initiatives, new product innovation and others can act to make Veda even stronger. As one can appreciate, the transaction of this size will take considerable time to negotiate and finalize. Equifax plans to conduct its usual thorough and disciplined due diligence. Smith stated: “… by no means would I ever go into a diligence process spending any amount of money, let alone $1.7 billion, $1.8 billion, with a mindset that is check the box. We take acquisitions extremely seriously, thoughtfully. And I would prefer not to disclose the exact list of diligence items that we have highlighted. But, trust me, it will be thorough diligence. We’re in the data room now. Teams will be in the country in a week. And we have a very thoughtful, exhaustive list of questions that the board and I along with the business unit leaders and COE leaders have thoroughly vetted. So thorough diligence, nowhere close to a perfunctory check the box.”
“The final transaction is subject to the approval of the respective Boards of Directors, regulatory approval in Australia, as well as Veda shareholders’ approval. If the transaction ultimately goes forward, we’d anticipate completion sometime between late February and early April of 2016. At this point, I’m very confident in our ability to effectively integrate Veda, should we have the opportunity to do so.”
