Another suitor for Motor Trade Finance has warned its shareholders of allowing its competition Turners to form a 10% blocking stake, which would stymie any other attempt at a 100% takeover.
The bank Heartland New Zealand yesterday released a market statement confirming it continues to ''have an interest'' in acquiring Motor Trade Finance (MTF), if MTF's shareholders, franchisees and dealers were receptive to a proposal.
Another ''if'' for Heartland was that the existing issues between MTF and the Commerce Commission, around the loan fees in the Sportzone case, ''were better understood''.
Heartland approached several MTF shareholders in mid 2014, with MTF's board later responding that the Heartland proposal ''was without merit'' and ''highly conditional and incapable of acceptance''.
Craigs Investment partners broker Chris Timms said two suitors for MTF would ''make for interesting times''.
''Turners and Heartland are both looking for business growth in finance or lending sector. MTF fits the bill for both,'' he said.
Turners has a stake of less than 1% in MTF but 10% of its loan book comes from the auction and insurance company. Turners announced this week it was seeking a 20% stake, which at the $1.15 per share offer would cost about $14.3million.
Any shareholder attaining a 10.1% blocking stake in a listed company means 90% ownership can not be achieved by a takeover company, which would otherwise allow the compulsory acquisition, or ''mopping up'' of the last 10% of shares outstanding, under the NZX's takeover code.
Heartland said if Turners achieved a stake of more than 10% in MTF, it would effectively have a ''blocking stake'', preventing a full takeover offer by another party.
Any potential premium for shareholders from a takeover offer would ''effectively be removed'' as competing offers would be discouraged, Heartland said.
Heartland also noted Turners' unsolicited offer came at a time of uncertainty for MTF, given the Sportzone case is pending, the outcome of which might or might not have material value implications for MTF.
