Heartland trumps Turners in bid for MTF cornerstone stake

The lender says it may pay $1.50 a share for between 10 percent and 20 percent of MTF.

Heartland New Zealand [NZX: HNZ], the listed bank, says it may offer to pay 30 percent more than financial services firm Turners [NZX: TNR] to buy a cornerstone stake in auto-financier Motor Trade Finances [NZDX: MTFHC].

The Auckland-based lender says it may pay $1.50 a share for between 10 percent and 20 percent of Dunedin-based MTF, and reaffirmed its interest in a full takeover provided it can reach agreement with the finance company's board, it said in a statement after the close of trading. The offer trumps Turners' offer to buy up to 20 percent of MTF at $1.15 a share, which closes at the end of this week. MTF's shares last traded at 99 cents on the ShareMart system.

"An initial cornerstone acquisition demonstrates Heartland's commitment to making a full takeover offer for MTF," Heartland said. "It would also provide a platform to enable Heartland to offer its broader range of finance products (including insurance, operating lease, plant and equipment, livestock, marine and unsecured personal finance products) through MTF's originating shareholders."

Last month, MTF told shareholders to wait for an updated valuation before accepting the Turners offer, saying an internal valuation last year valued the company's shares for non-originating shareholders at $1.16 apiece, and was "substantially higher for active shareholders" who also receive extra commission due to their relationship with the lender.

MTF said it would engage with both suitors and take advice on issues raised by the two approaches.

Heartland said MTF shareholders who've accepted Turners' bid can change their mind under the cooling off period required under law.

The bank's shares fell 0.8 percent to $1.18, and have gained 5.3 percent this year.