Car auctioneer Turners has fallen far short of gaining a 20% stake in Motor Trade Finance and even failed to gain a 10% blocking stake - having cornered just a 7.6% stake.
Turners and bank Heartland New Zealand have both been vying for stakes of about 10%-20% each in Motor Trade Finance (MTF) with Turners' unconditional offer having closed, while Heartland's is yet to be formally presented to shareholders and is conditional.
If either can acquire more than 10%, that will form a blocking stake, meaning no other party can attain the 90% necessary to complete a 100% takeover.
The unconditional offer by Turners, $1.15 per share, is below the bottom of MTF's valuation range, while Heartland's offer is $1.50 per share.
Heartland's intention is to seek a 10%-20% stake in preparation for making a full 100% takeover, but is subject to due diligence.
Turners chief executive Paul Byrnes said yesterday the company had received valid acceptances, approved by MTF's board, which increased its stake in MTF to 7.6%, with payments going to shareholders within days, funded out of Turners' working capital.
Craigs Investment Partners broker Peter McIntyre said the market was now watching to see what Heartland's next move would be.
''The scenario so far is Turners is out of the blocks, while Heartland is not,'' he said.
With Heartland's offer not actually at the acceptance stage yet, Mr McIntyre said some shareholders would be thinking ''a bird in the hand is worth two in the bush''.
He also noted a constitutional change would have to be made by MTF for any party wanting to hold more than 10% of MTF's stock.
Mr Byrnes said ''some discussions'' would continue with MTF shareholders who were required to hold MTF shares while their loans had some balance outstanding.
''We are prepared to consider taking over existing obligations or acquiring receivables from MTF members in `run-off' to enable them to sell their holdings,'' Mr Byrnes said.
• Among Heartland's stipulations for a full takeover bid is that MTF does not have any actual, claimed, or potential liability for excess fees charged in 39 loan contracts originated by Sportzone between May 2005 and July 2008, in a case brought against the lender by the Commerce Commission, BusinessDesk reported.
Sportzone had an agreement with MTF allowing the defunct motorcycle business to write credit contracts for buyers of motorcycles, and the case is set to be heard in the Supreme Court next month.
