GenQ - For the not so straight individual

BUSINESS NEWS: Rams Home Loans Ltd., the worst performing initial public offering in Australia this year, is a ``prime takeover target,'' according to John Symond, managing director of Aussie Home Loans Ltd.

Rams shares plunged 36 percent on the Australian Stock Exchange Aug. 16 after it said it failed to refinance A$6.17 billion ($5 billion) of short-term U.S. debt. It ended Friday at 89 cents, from an IPO price of A$2.50 on July 27. Symond said he won't bid for the non-bank lender, though he would be interested in acquiring less well-known mortgage brokers.

``Maybe an Australian bank will pick them up for less than half price,'' Symond said in an interview on the Sky News ``Sunday Business'' program. ``Aussie wouldn't go and acquire a brand because we believe we have the best consumer brand. To buy and pay money for a brand and not use that brand; that doesn't fit into what our plans are.''

Rams offers low-documentation loans and mortgages for 100 percent of the purchase price of a home under the slogan ``No deposit? No worries!'' It relies on short-term U.S. debt for more than 40 percent of its funding.

Concerns about the lending standards of Australia's non-bank institutions increased as fallout from the U.S. subprime market triggered a worldwide credit crunch.

Symond, who founded mortgage originator Aussie Home Loans 16 years ago, said the surging cost of funding loans will ``accelerate the rationalization'' of Australia's non-bank lending industry.

``I've been vocal about rationalization because it is a relatively new industry and rules to entry have been very low,'' he said.

Symond said he is interested in acquiring a non-bank lender that, like Aussie, raises money through broking.

``There are a number of non-bank lenders out there who will be looking for a bigger umbrella big brother,'' Symond said. ``Aussie would be very interested in that.''