Pero planned to sell his business - not buy it

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Mike Pero didn’t intend buying back the 50% of the nationwide mortgage broking firm he didn’t own. Rather he and fellow shareholder South Canterbury Finance intended selling the business to a third party.

Wednesday, June 18th 2003, 9:27PM

by Jenny Ruth

However, earlier this week, Pero announced he had bought South Canterbury’s stake for an undisclosed sum.

"I realised how good the business was. I saw parts which weren’t developed yet and I thought I might stay around a lot longer," Pero says.

Pero won’t expand on these plans for competitive reasons, but they should become obvious over the next six months.

So why did he buy out the other shareholder?

"If you had half a share in a lotto ticket or a race horse that you knew was going to come in, wouldn’t you want the other half?"

South Canterbury bought into the business in 1996 when the company had a mere handful of offices in the South Island and provided the finance to back expansion into the key Auckland market. The company now has offices in eight cities with more than 50 people working either as employees or franchisees.

Pero says that South Canterbury Finance wanted to exit the business as it had other businesses it wants to grow.

"For me, the relationship has been excellent. I have only good things to say about South Canterbury.

Pero says South Canterbury received "comfortably more than 20 times" the amount it paid for the stake.

But could the company survive without Pero himself? "It could for the same reason Noel Leeming is still around without Noel Leeming, why Michael Hill is without Michael Hill and Stefan’s Orange Juice without Stefan," he says.

For "a brief moment." South Canterbury had considered buying Pero out and "I had agreed to stay on as a marketing figure."

Pero says he’s never considered allowing his franchisees to buy shares in his company. "It’s a conflict of interest. It just wouldn’t work and I don’t want any other shareholders. They can make more money as franchise holders."

For more on Mike Pero see the latest issue of the NZ Mortgage Mag. To get your copy click here

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