Document reveals how L&G came close to buying troubled network
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A letter seen by Mortgage Strategy indicates that Legal & General was considering buying The Mortgage Times Group prior to the network’s demise before Christmas.
The letter sent to Chris May, director at Mortgage Times, from L&G appears to suggest that wheels were in motion to prepare for a takeover deal.
The letter is dated December 10, less than two weeks before staff were told that the network was going into administration.
It reads: “Further to our recent meeting and conversations I can now confirm that we are close to completing our due diligence and we just await the final information discussed this morning.”
The letter then goes on to outline the timetable for the deal, with an internal sign-off meeting booked for December 15. It also mentions a formal offer being drawn up by December 17 and then proceeding to formal contracts.
Staff were told by Mortgage Times management that the network was going to be placed in administration and that they would not be paid on December 21.
Appointed representatives were also sent an email informing them that the network had applied to change its regulatory permissions, meaning they were left unable to trade.
In the email Mortgage Times referred to a potential investor and said it was saddened that at the 11th hour the investor decided not to proceed with an offer.
It is unclear why L&G opted against the deal, but one unsubstantiated allegation was that L&G wanted the Mortgage Times directors to put more money into the company.
Last March Mortgage Times established a trading partnership with L&G Mortgage Club which meant that ARs would be paid by the club directly.
L&G declined to comment on whether it was involved in a proposed takeover deal.
In response to the collapse of Mortgage Times Which Network, which aims to put ARs in touch with the most suitable network for their needs, organised a network beauty pageant to help brokers to resume trading.
This was due to be held today but had to be cancelled due to adverse weather conditions.
As Mortgage Strategy revealed last week, Revenue & Customs issued a petition to wind up Mortgage Times on November 12 in a bid to recoup money it says it is owed.
The case is scheduled be heard at The Royal Courts of Justice in London this week.
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Readers' comments (2)
Anonymous | 11 Jan 2010 8:48 pm
Its a real sad shame for the advisers who have lost money in the most difficult trading times in a generation. MT should have been more open and honest to the loyal staff and advisers a long time ago - and the directors all continue live in million pound mansions and drive nice cars.
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Anonymous | 12 Jan 2010 7:45 am
The 2008 accounts were only lodged with Companies House in early December 2009. It is unsurprising that L&G pulled out of the deal almost immediately thereafter. It would be interesting to see more of the correspondence from MTG to L&G, and what assertions were being made about the Company by the MTG directors to L&G.
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