Seaview Consulting’s Bob Neil

Preliminary bids for Madison Financial Group (formerly Sargon Adviser Services)* have been collected and interested parties have been asked to sign non-disclosure agreements as part of a sale process that will see the advice licensee find a new home as soon as early April.

Around a dozen bids have been received, it is understood.

The process to sell Madison is being run by Seaview Consulting’s Bob Neil who was appointed by consulting firm, PwC, the receiver of OneVue’s secured assets in Sargon. Sargon was an aggregator of trustee services led by Philip Kingston that went into administration in January.

“I expect it will be a reasonably quick process,” Neil told Professional Planner, after adding that he expected a final buyer for Madison to emerge from the process as soon as the first week of April.

Seaview has not narrowed the scope of the process at this stage, Neil confirmed. He said all bids for the licensee with authority of more than 100 representatives (based on Professional Planner’s 2019 Licensee Owners List) have been considered in the first round of bids.

Preliminary bids for Madison will be finalised in mid-March with a short list of possible acquirers narrowed before a data room is opened and final bids are due at the end of March, it is understood. A final sale of Madison could be completed by the end of April, it has been said.

While Seaview is in the process of finalising an analysis of Madison and the current market for financial advice licensees to form the basis of the Memorandum of Understanding for the deal, Neil declined to comment on valuation.

A number of people who separately said they had an interest in acquiring Madison and who spoke to Professional Planner on the condition of anonymity put price guidance for the advice group in the $4-8 million range.

One of these people noted that due diligence would be a key part of the process for determining the price for Madison given the impact the Hayne royal commission has had on advice business valuations and the cost of remediation worn by financial institutions disposing of wealth assets in the current environment.

While some would-be buyers talked down Madison’s price guidance, OneVue CEO Connie McKeage believed demand for the asset was strong.

“This is not a distressed sale,” McKeage said on Tuesday. McKeage pointed out that neither she nor OneVue was involved in the process to sell Madison.

Sargon owed $31 million to OneVue in deferred payments for the purchase of its Diversa Trustee business, which Sargon agreed to buy last year. Sargon was due to complete this deferred payment by May 29, but on January 29 administrators were appointed to the business.

Of the $31 million owed to OneVue, the business has recouped $4.63 million following the sale in late February of a 20 per cent stake in ASX-listed integrated financial services company, Sequoia Financial Group, the other Sargon asset in addition to Madison that OneVue has security over.

OneVue told the ASX in January it planned to use the proceeds of the deferred payment to fund a buyback of its shares later this year. On Tuesday McKeage said the ASX-listed OneVue would provide an update to the market on its buyback plans imminently.