Investors in Hanover Finance are being urged to accept an estimated $400 million offer from the rural company Allied Farmers.
Hanover's board says a commissioned report by independent expert Grant Samuel found the planned offer to swap debt for shares in Allied Farmers was superior to Hanover's current revised repayment plan.
The 88-page report says there's a real risk Hanover Finance will go into receivership, which would be the worst option for investors.
The finance firm owes $554 million, and Hanover recently told its 16,500 investors they would only get 70 cents of every dollar invested.
Under the Allied Farmers proposal, investors are being promised 78 cents of value for every dollar.
The chairman of Hanover, David Henry, says it is unlikely Hanover investors will receive a better offer.
Last week, there was talk of a rival bid being prepared, but it appeared to have fizzled.
The report warns that many Hanover investors are likely to sell their new Allied Farmers shares, which could cause the price to crash.