Allied confident investors will support Hanover deal
Allied Farmers is confident it can realise more value from Hanover’s loan books than the failed finance company can operating under its moratorium.
Thursday, December 3rd 2009, 10:23PM
Chief executive John Loughlin told brokers in a conference call today that Allied has experience recouping value out of its own loan books, and that it will be able to take a long-term view on squeezing the most of Hanover's debtors that the finance company's directors can't do under the conditions of its moratorium.
"Some of the developments in United may not proceed" and investors probably won't get the 90 cents return offered under the current moratorium, Loughlin said. "We've had a great deal of success and in most cases, we've collected in full" on the impaired property loans the company ran through the current turmoil.
Hanover Finance's independent directors are recommending investors accept the $400 million all-stock takeover offer from Allied, calling the proposal "superior" to the status quo. Last month, Hanover posted a $102 million loss and confirmed the best-case scenario would offer debenture holders 70 cents in the dollar. Hanover and United has $296.8 million of debentures and term deposits and total securities of $317 million. A year ago, the same assets were valued at $516.6 million.
Allied's directors are touring the nation to drum up support amongst their own shareholders, who need to approve the deal that would result in Hanover investors owning more than 90% of the enlarged company.
Managing director Rob Alloway said he was "pretty confident" Allied's investors would support the option that would transform the firm into a top 50 company, boosting its market cap to more than $400 million from its current $10.6 million.
Allied will consider keeping on board some Hanover staff, though the company will undertake a complete review of the business, Loughlin said.
"We have respect for the institutional knowledge that's in Hanover, and we won't be stupid and get rid of everybody," he said.
(BusinessWire)
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