GPG gets rid of Allied shares ahead of Hanover vote

Guinness Peat Group, which considered launching a bid for the assets of bombed out finance company Hanover in competition with Allied Farmers' offer, has dumped its 4.1 per cent Allied shareholding.

It is understood that GPG sold its Allied stake on Thursday, less than a week before Hanover investors make their crucial vote on Allied's proposal, which takes place today.

Allied Farmers managing director Rob Alloway said yesterday it suspected the sale of the large holding was GPG's stake. Allied would confirm that today when it saw the formal share registrations.

Alloway said the sale had taken roughly 30 per cent off the Allied share price during the crucial five trading days in which the Allied share price would be calculated for the purpose of the possible Hanover transaction.

"So it's driven the volume weighted average price down," Alloway said, adding the company was assembling a fact sheet showing the trail of movements for the Securities Commission and expected to provide it to the commission today. "We are not aware of anything else which would suggested why the price had moved."

Thursday's trading saw 353,333 Allied shares traded, the most in a single day since November 2006, pushing the share price down 8 cents to a record low of 20c.

GPG's New Zealand director, Tony Gibbs, did not return calls for comment. But asked about GPG's Allied shareholding on November 30 in light of the Sir Ron Brierley-chaired firm's decision not to make a counter bid for Hanover, Gibbs said he was not sure what GPG would do with the stake. "I can't answer that because frankly I just don't know," Gibbs said.

"I want to see what the Allied board comes out and discusses and I haven't seen the Grant Samuel report [on the Allied- Hanover proposal]." Gibbs also said Allied was not in the greatest of shape and he was not sure whether the Hawera-based firm's proposal to swap its shares for Hanover debt instruments would be good for either Hanover bondholders or Allied shareholders.

"It looks like taking a pile of custard from one plate and putting it on another," Gibbs said. "You've got a loan book which basically no-one's able to value."

Under sharemarket rules, because GPG holds less than 5 per cent of Allied, it is under no obligation to tell the market it is selling.

Sharemarket operator NZX said on Friday, after seeking information from Allied and the originating broker, it was referring unusual trading in Allied shares to the Securities Commission for urgent inquiry under the latter's statutory powers.

Spokesman Roger Marwick said the Securities Commission was reviewing the material it had received.

On Friday Allied released a statement saying it was aware a large parcel of shares traded on Thursday, but it was unaware of the buyer or seller.

Allied's shares saw even heavier trading on Friday with 1.034 million of the firm's 37.7m shares changing hands with the share price slipping 1c to 19c.

GPG's interim report shows as of August 31 it valued the 4.1 per cent Allied stake at 35c per share, or $500,000.

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