26 Nov 2009

Second bid for Hanover fizzles out

7:26 am on 26 November 2009

A potential rival bid for struggling finance firm, Hanover, fallen through.

Reports had suggested another party would challenge Allied Farmers plans to swap its shares for the loan books of Hanover and United Finance.

However, Hanover chairman David Henry says that's fallen through, and he understands the unnamed firm is instead considering taking a stake with Allied Farmers.

Speculation over the identity of the firm has been rife in investment community.

Analysts say Guiness Peat Group, which already runs a stressed property asset fund, and has a near 5% stake in Allied Farmers, could be interested, though director Tony Gibbs is uncharacteristically keeping quiet.

Tower, who's chief investment officer Sam Stubbs used to head Hanover, has also been touted, but the insurer and fund manager denies involvement.

Marac, the finance arm of Pyne Gould Corporation, is also understood to be out of the game.

Independent report

A letter sent to Allied shareholders indicates an independent report by Grant Samuels, concludes Allied Farmers' offer is fair and superior to the current moratorium or receivership, and that a better offer is unlikely.

The independent report will be sent to investors early next week, alongside explanatory notes from trustees, so they can properly assess the deal, Hanover says.

The deal needs approval from 50% of Allied Farmers shareholders and 75% of Hanover's investors.

Allied Farmers shareholders will vote on the proposal at a special meeting on 8 December while Hanover is holding its meeting on the 16 December.