EXCLUSIVE
Mortgage magnate Mark Bouris has broken his silence on the collapse of his Yellow Brick Road company’s share price, revealing he wants to merge with a major rival.
Famed entrepreneur 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 carnage in the stock market has sparked criticism, but Mr Bouris argued to Daily Mail Australia on Monday that the share price reflected not his company’s cash position but the stock exchange’s accounting rules.
Mr Bouris told Daily Mail Australia the share price collapse was a result of four major groups now owning Yellow Brick Road, which was not the case 15 years ago.
‘Just in terms of the strategy: why is the share price low, very low?
‘When we first went public we had very few major shareholders on the register.
“Just me and NEC, which became known as Nine Entertainment Corporation.”
Mortgage magnate Mark Bouris (pictured with model Monika Radulovic) has broken his silence on the collapse of his Yellow Brick Road company’s share price – and revealed he wants to merge with a major rival
The Bouris company is now one of four major investors that own 75 percent of Yellow Brick Road, along with Nine Entertainment Corporation, hedge fund Magnetar Capital and Sandon Capital Investments.
The entrepreneur’s Mark Bouris Family Company Investments owns just under 20 percent of Yellow Brick Road and is looking to merge with companies such as Aussie Home Loans, founded by John Symond, who is now retired.
Mr Bouris argued that because four shareholders control three-quarters of the company’s 330 million shares, it is difficult for anyone to buy into the company, leading to less demand for shares.
“The stock price is a function of 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 share price is a reflection of supply and demand and the supply of new shares, which they call liquidity. The supply of shares is limited, so you can’t buy any.
“If you’re a buyer, you’re never going to be able to bid enough, you’re never going to be able to pay enough to acquire enough stock to make it valuable to you.”
Mr Bouris, a former host of Celebrity Apprentice, said a private company would be more attractive to private equity firms, arguing they could more easily increase their stakes.
“There are a lot of private equity groups,” he said.
‘And we would probably be more interesting if we were not listed, because private equity generally does not want to be in listed environments anyway.
“It removes a lot of hurdles, but I’m not talking to a private equity group to buy us at this stage.”
While Yellow Brick Road reported a loss of $3.5 million in the year to June 30, Bouris said this reflected interest rate increases that reduced the value of the brokered loans and reported underlying pre-tax profits, which were still positive at $436,000, tarnish.
‘If interest rates rise, you can borrow less. “You’re lending less money to more people, which means the size of your book minus repayments gets smaller,” he said.
‘What you need to do is make an adjustment to your profit because of the depreciation 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 percent of Yellow Brick Road and is looking to merge with companies like Aussie Home Loans, founded by John Symond (pictured right with wife Amber)
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 the company listed on the Australian Securities Exchange in 2008.
Mr Bouris argued that delisting from the ASX would make it easier for the big four investors to raise capital, arguing the value of his mortgage portfolio was worth three times its market capitalization of $18 million.
“In cash terms we are making money,” he said.
“What we receive, minus what we spend monthly, on an annual basis, is what we make money. We turn over a lot of dough.”
Mr Bouris has also revealed he is keen to merge or acquire companies such as Aussie Home Loans, which Wizard bought in 2015.
“I’m more interested in making us bigger and growing,” he said.
‘That would be by taking over ourselves or through a merger.
‘That is probably more interesting for me and the shareholders than doing anything else.’
Yellow Brick Road bought Resi Mortgages in 2014 for $36 million and Mr Bouris is said to be keen to explore the idea of merging with Aussie Home Loans, which in 2021 merged with Lendi, a mortgage broker part-owned by Commonwealth Bank.
“If Aussie wanted to merge, I would certainly be interested in talking to them,” Bouris said.
“If they said to me that they would be interested in merging Aussie and Yellow Brick Road, I think that would be a marriage made from heaven, I would love to do something like that, and/or other brands that might want to do nothing.
“Merging with another big brand – there are some big brands that need scale.
‘This industry, you either get bigger or you get out.
‘We are one of the four largest, so everyone among us has to either leave completely or sell, or grow bigger, buy something else.
‘We would like to pick something up in the future.
‘I’m just strategically preparing us for better value for all shareholders in the future
Mr Bouris founded Wizard in 1996 with help from future media and casino billionaire James Packer, at a time when non-bank lenders were rapidly entering the Australian mortgage market.
Wizard Home Loans was sold to GE Money for $500 million in 2004, giving Mr. Packer a windfall that boosted his value after a disastrous investment at OneTel that saw him lose a total of $1 billion in 2001 with future media mogul Lachlan Murdoch.
Mr Bouris founded Wizard in 1996 with the help of future media and casino billionaire James Packer (pictured in 2008 with then-wife Erica Baxter) at a time when non-bank lenders were rapidly entering the Australian mortgage market.
Mr. Bouris and Mr. Packer are still friends, and Yellow Brick Road’s executive chairman still sends him Christmas and birthday cards.
But he’s not sure he would want to invest in Yellow Brick Road Holdings.
“I talk to him, I check on him, see how he’s doing,” Bouris said.
“Send him Christmas (cards), birthdays and things like that when he’s in town.
‘Is it possible that he wants to reinvest in the company? I don’t think so, not at this stage.
“I certainly didn’t talk to him about it.”
Yellow Brick Road shareholders will vote on the matter at an annual general meeting on October 24.