All eyes will be on the Allied Farmers share price when the company comes out of a trading halt this morning, Craigs Investment Partners broker Chris Timms said.
Hanover Finance investors approved by the narrowest of margins yesterday the deal which will see Allied Farmers buy the finance assets of Hanover Finance and United Finance.
There were four separate votes.
Hanover Finance's secured depositors voted 75.45% in favour.
The votes needed to be 75% in favour.
United Finance investors voted 79.48% in favour.
The subordinated noteholders voted 97.47% in favour and the Hanover Capital investors voted 88.33% in favour.
The vote count result was delayed by about two hours from original estimates.
More details would emerge in the next few days on how Allied intended structuring the deal, he said.
However, of more interest would be the share calculation.
Earlier reports from Allied said the deal was worth $400 million and the rural servicing company intended issuing 900 million new shares to finance the deal.
Mr Timms believed that with Allied setting the five-day volume weighted average price of its shares at 20.69c yesterday, the company would need to issue more than 1.93 billion new shares to conclude the deal.
Together with the 37.6 million shares already on offer, Allied would have about 1.97 billion shares on offer, with a market capitalisation of $394 million.
Allied would have more shares on offer than any of the NZX-10 companies.
The next significant movement in the deal would be the issuance of the shares, Mr Timms said.
"Watch what happens after that.
"I can guarantee that a lot of the Hanover people won't have had shares before.
"They will have to go through that process."
For instance, someone with $200,000 invested in Hanover would receive more than 966,000 shares.
Some numbers would be ridiculously large, he said.
"Hanover investors have gone straight from the frying pan into the fire," Mr Timms said.
Hanover independent chairman David Henry said that by accepting the proposal, investors had chosen an opportunity to realise much greater long-term value from their investment than remaining in the existing debt restructure plan.
The Allied proposal provided a much better structure for the assets to be held in than the Hanover and United companies could have achieved in the foreseeable future, given the extremely difficult commercial development property market.
Hanover director Mark Hotchin said Allied Farmers had a good future.
It now had a considerable asset base and the time and resources available to achieve much greater value from the assets in the future.
The New Zealand Herald reported that up to 1000 investors met in Auckland to decide whether they should sell the Hanover assets to Allied.
About 15,000 investors are owed $500 million from Hanover and United which stopped making repayments on their debts in July 2008.
Investor Tom Brosnahan questioned whether the deal between Hanover and Allied was rushed.
He said the Hanover directors were keen to get rid of investors who were a "millstone" around the necks of directors.
Another investor, Dr Brian Earnshaw, said he had a doctorate in electrophysics and considered himself intelligent.
"But when it comes to investing money, I am dumber than dumb, as my $70,000 investment in Hanover Finance's so-called secured debentures clearly shows."
Hanover director Eric Watson had not shown up.
Mr Hotchin should be applauded for at least having the guts to front up, Dr Earnshaw said.
NZX10 Company Shares Market Cap
Auckland International Airport 1.225b $2.329b
Contact 596m $3.438b
Fletcher Building 606m $4.685b
Fisher & Paykel Healthcare 512m $1.729b
Infratil 568m $926m
Kiwi Income Property 803m $827m
Ryman Healthcare 500m $1.02b
Sky City 575m $1.88b
Sky Television 389m $1.918b
Telecom 1.894b $4.546b
Proposed
Allied Farmers 1.97b $394m
