Would-be digital bank Goldfields Money has come up with an alternative deal to lender FirstMac’s takeover offer: a merger with mortgage broker Finsure.

The board is recommending shareholders reject FirstMac’s $1.27 a share offer and instead accept a merger with Finsure, which will see its shares valued at $1.50 in the transaction.

It notes this is above the $1.27 to $1.39 range suggested in a report by independent expert Ernst & Young in relation to the FirstMac offer.

The deal will result in Goldfields Money (ASX:GMY) owning a national mortgage aggregation network and wholesale mortgage business.

Goldfields shares over the past year. Source: Investing.com
Goldfields shares over the past year. Source: Investing.com

Goldfields will issue 40.75 million shares at $1.50 each to Finsure shareholders, valuing Finsure at about $61.1 million and the merged group at $97.5 million.

Goldfields has been contacted for comment.

Goldfields shares are currently trading at $1.30, valuing the business as $29 million.

The bank is also hosing down a crisis as ATM owner Stargoup, which had to send three of its subsidiaries into receivership this week in order to pay off $9.5 million in debt.

Goldfields promised to keep supplying cash for Stargoup’s ATMs, but reduced the amount from $30 million to $10 million and demanded a $100,00 fee to do so. It’s owed $526,000 in fees by the ATM operator.