Trustee to scrutinize Allied offer

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Hanover Finance trustee Perpetual Trust says it will go through Allied Farmers' debt-for-equity offer with a fine-tooth comb to ensure investors fully understand the proposal before voting on the deal next month.

Listed rural services and finance company Allied Farmers yesterday drew a collective breath from the investment community with its $400 million offer for the property and loan assets of the cash-strapped lender.

News of the deal prompted commentators to square off as to whether it would better benefit Allied and its shareholders or Hanover's investors.

New Zealand Shareholder Association chairman Bruce Sheppard called on Commerce Minister Simon Power to intervene.

With tensions running high, Perpetual chief executive Louise Edwards sought to calm things, saying the trust would walk investors through the offer, although there would be no recommendation from the trustee.

Every step would be taken to ensure investors understood the deal, and any concerns uncovered in the transaction document would be highlighted to ensure an "informed decision" was made by all.

"This [deal] is such a departure from what investors initially put their money into and to what they then agreed to under the debt- restructuring plan, that it is to be expected that investors will be unsettled and even sceptical," she said.

"Perpetual Trust will review the material being sent to investors and will need to be satisfied that it is clear, understandable and accurate before approving it."

Perpetual is trustee for the secured investors in Hanover subsidiary United Finance, unsecured noteholders in Hanover and secured bond holders in Hanover Capital.

If approved, the deal would see Hanover and United investors receive Allied Farmers ordinary shares issued at a five-day average market value.

- © Fairfax NZ News