It's always been about business at Liberty Financial. Always.
Via a well-timed IPO, Liberty Financial is setting out to become a bigger wheel in financial services, now riffing off the agency of the ASX.
After 23 patient years, Sherman Ma, the founder of Liberty, is giving his buddies, strategic shareholders, an exit via a stock market listing. There must have been trade sale scenarios for Ma to consider but the ASX comes first. For fun and profit.
Liberty Financial is a natural for the ASX and immediate takeover fodder.
Layering social justice into its business model from the beginning, Liberty was a pioneer in sub-prime mortgage credit, facing few competitors when Ma barged into the debt capital market all those years ago.
Sherman Ma brings the combination of experience and endeavour that is rare in an ASX newcomer. Liberty will be one of the freest listings ever.
Ma may well be undervaluing Liberty Financial at the asking price but then he isn’t selling any shares into this minimally compliant IPO for the group. The 80 per cent stake finds its value story in the free float of 20 per cent that will be Liberty’s ASX beginnings, soon.
Other than big banks, La Trobe Financial, Pepper and Bluestone if they are still doing any, Liberty still faces little competition in sub-prime, alt-prime or whatever the Ma machine wants to label it.
Most banking folk are wary of sub-prime and sliding too far into the credit wrecks of sole trader land, banked the way they need to be. So the target market is almost as wide open as ever and Liberty bring plenty of purpose to their ASX debut.
Sherman Ma is breaking into ASX ranks to see what else might be done. A few fireworks and at the forefront of M&A conversations, what has Ma been keeping up his sleeve all these years?
A good story for one thing. Banking Day understands Liberty’s existing funders are enthusiastic about the proposed reorganisation of the capital structure and the strategic clarity in the progress of Ma’s business to the ASX.
Specialist credit investors - their owners anyway, with international banks among them - are priority allocations in the bookbuild underway for the initial public offering of Liberty Financial.
The prospectus will be out by Thursday, a week after pros were cut into the deal. A small-beer retail offer will be part of the mix.
As for the asking price, Sherman Ma’s mates are scooting their deal through at a fixed price of 11x FY21 NPATA of A$165 million.
The takes the market cap of Liberty at the offer price to $1.82 billion.
Today, Commonwealth Bank opens for trading looking brighter than ever and Liberty will soon share this firmament.
Snuggle partners, listed names, if they have or had business cases to draw Liberty into their group surely they’d have done this by now.
Anyway, AFG, Flexigroup, Openpay, BOQ, BEN, Zip Co and those Afterpay blowhards – there will be M&A mischief aplenty once Liberty Financial lists.
Sherman Ma’s principal strength is making money on his terms. Ma missed many listing moments before. ‘ Why now?’ is explained by the passage of the years and the mayhem of the pandemic.
Ma might rip right by the ASX names mentioned above. Some sort of roll-up story, know-how like no-one else, we dunno what man on a mission Sherman really wants. Other than accumulating in the late capitalist manner.
Financial services outfits down for this might be around for the long run. Valuable indeed.
Australian banking is being reborn. Liberty Financial can have loads to do with this or nothing.