Turners car auctioneers and insurers has launched a surprise bid for a stake of up to 20% in Motor Trade Finance, but is ruling out a takeover play.
Turners' offer for Motor Trade Finances (MTF) is through its subsidiary Turners Finance Ltd.
The $1.15c per share price offers shareholders a premium of more than 22% on the most recent 94c per share trading, and to attain 20% would cost Turners $14.3million.
Turners chief executive Paul Byrnes said about 10% of its new loans originated through MTF and the offer to increase the shareholding better reflected Turners' commitment to the MTF business model.
Turners holds 218,452 shares, 0.95%, of MTF's ordinary shares on issue, Mr Byrnes said in a statement yesterday.
''This is not a takeover offer. We will not, in any circumstances, hold 20% or more of the ordinary shares in MTF as a result of this offer,'' he said.
Craigs Investment Partners broker Peter McIntyre said it would be interesting to see whether some shareholder support had already been promised, or if Turners could otherwise ''eke out some support'' to get near the target 20%.
While the offer was ''a bit out of left field'', he said there had recently been ''some uneasiness among shareholders'' about MTF's operations, followed shortly after by the sudden and unexplained departure of veteran managing director Angus Bradshaw, after 17 years.
In August last year, nine MTF shareholders, representing 8.1% of the company, forced MTF to hold a special meeting over its handling of an earlier court case and its subsequent communication and disclosure to shareholders over the litigation.
On the question of a takeover, Mr McIntyre said: ''Further down the track, anything is possible.''
He cited how Briscoes had accumulated shares in Kathmandu before launching a hostile takeover bid in July.
Mr Byrnes said MTF's constitution had a restriction on any shareholder having more than a 10% holding and its board could refuse or delay registration above a 10% limit, or seek shareholder approval to allow acceptances above the 10% limit.
Turners cash offer will be sent to all MTF shareholders this Thursday, and will close on October 17.
