15 Sep 2015

Turners eyes vehicle finance company MTF

1:56 pm on 15 September 2015

The subsidiary that runs Turners Car Auctions, Turners Limited, wants to buy up to a fifth of vehicle finance company Motor Trade Finances (MTF) - but is ruling out a takeover offer.

A bundle of New Zealand money.

Photo: RNZ / Alexander Robertson

Turners already owns about 1 percent of MTF's shares but now wants to purchase up to 20 percent - just shy of a takeover offer.

It is offering $1.15 a share and will need the support of at least 75 percent of MTF's shareholders to buy more than 10 percent of the company.

Turners Limited CEO Paul Byrnes said the company wrote about 10 percent of MTF's new lending, so it made sense to have a bigger stake.

He said it was over to MTF's board to decide if they should lift the company's restriction on individual shareholders holding more than 10 percent.

"What we're saying is we're pretty relaxed, even if we got more than 10 percent and couldn't vote some of those shares.

"Likewise, we feel that we could add some value at the board.

"There's no guarantee we would get a seat on the board, but we would be interested in getting closer, and perhaps utilising our expertise in the wider financial services and and insurance industries to bring value to the business, for the benefit of all shareholders."

MTF chairperson Stephen Higgs said shareholders were not under any obligation to accept the unsolicited offer.

The company has also told shareholders they need to maintain their own minimum holdings in MTF, and no sales to Turners would be processed that would take a current shareholder's stake below that level.

MTF made a net profit of $3.2 million dollars in the six months to the end of March, with receivables of $512.5 million.

The offer will go out to MTF shareholders on Thursday.