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Kevin Duffy on mortgages

Deadlines are such that this piece had to be written before B&B announced who its preferred Charcol buyer might be so, at the risk of making some clumsy predictions, here is what my crystal ball tells me.

One sure thing is that an MBO can be discounted. I sense an unwillingness on the part of the vendor to surrender the business to its management at what might be a wholly unattractive price. A cooling agency market, potential and unknown endowment-related liabilities and unconcluded post-N4 costs may have already deflated the initially hoped for sale price .

If recent speculation is well founded, the agency, surveying and brokerage businesses will be bundled together. The prospect of a sale to the likes of Countrywide, Spicer McColl or Direct Valuations may see Charcol adopted by a foster-parent, with far-reaching repercussions for its staff and clientele.

I have suggested that arriving at an empirical valuation of Charcol is tricky. I envy its undoubted brand potency and its two technical galacticos, Ray Boulger and Walter Avrilli. Notwithstanding some recent consultant attrition, there is still a nucleus of 20 or so prodigious consultants at the company but will all these want to remain put under the new regime?

Which leads me to conclude that the new buyer will have three options as to what direction to take. First, develop the Charcol brand name, retaining its individual sovereignty, second, sell the business on once again, having used it purely as a makeweight in the deal this time around, or, third, aggregate it with an existing (and likely lesser established?) brand.

If Rob Clifford&#39s Mortgageforce (Direct Valuations) wins the bid, then the prospect of the former being rebranded as Charcol and integrated with the existing Mortgageforce proposition across, say,500 high streets is a tantalising thought.

Such a strategy would also be a bad omen for the likes of the nil-fee brigade such as Purely Mortgages as a venture of this size would surely seek to replicate its call centre and fulfilment model but with the best brand name in the business.

Curiouser last week were suggestions that GMAC-RFC were bidding. In some ways, if I was one of the aforementioned galacticos, this would be the dream ticket. In Stephen Knight and Messrs Blight and Searle, Charcol could resuscitate under strong and charismatic leadership. That said, I do not see it happening. GMAC-RFC is a success story because it keeps things simple and avoids high maintenance projects.

In many ways, Charcol is in the last-chance saloon. It has had five owners in less than 10 years. In its halcyon days of the last decade, it did not have so many mortgage clubs competing with it for the best products. As a colleague summised last week, persistent surgery ultimately saps a beautiful woman&#39s essence. A trout with a pout it ain&#39t but something tells me that within two years, it will be back under the surgeon&#39s knife.

Kevin Duffy is managing director of Hamptons International Mortgages

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