Market commentators predict Allied Farmers shares will suffer next week as Hanover and United Finance investors sell their new shares in the rural services company.
Hanover and United Finance investors will be issued their new shares in Allied Farmers early next week after they narrowly approved a plan by Allied to buy the troubled finance company's loan books.
The deal scraped through with 75.45% of secured depositors -the biggest investor group -agreeing to the propsal, just above the threshold of 75%.
Financial advisor Murray Weatherston says he's surprised the deal was approved, and he is picking Allied Farmers share price to collapse as a result.
More than 1000 investors were at a special meeting in Auckland on Wednesday where Hanover's directors warned that receivership was increasingly on the cards and the proposal from Allied Farmers was their best option.
Allied Farmers chairman John Loughlin says it could be two to four years before Hanover investors get value out of their assets.
He says some people who desperately need cash will be selling their shares, but the situation will stabilize over time.
All of Hanover's assets will be transferred to Allied Farmers when the deal is settled on Friday.
Voting was close. Approval by at least 75% was needed. Hanover has 16,500 investors.
Hanover Finance-secured depositors voted 75.45% in favour while United Finance investors voted 79.48% in favour.
Subordinated noteholders voted 97.47% in favour and Hanover Capital investors voted 88.33% in favour.
Allied Farmers shareholders voted in favour last week.
By 12.30pm on Thursday, Allied Farmers was down 2.3 cents to 15c after a trading halt was lifted.