Several Hanover Finance investors today urged their fellow investors to reject the Allied Farmers share offer to them, saying receivership would be a better option.
More than 500 investors in Hanover and United Finance attended the meeting at Ellerslie Convention Centre in Auckland today to vote on whether to accept the Allied Farmers offer.
The shares of Allied Farmers were placed on trading halt this afternoon pending the result of the vote, NZX Regulation said in a statement.
The offer would see Allied Farmers acquire all of Hanover and United's assets and give them shares.
Under the offer, United Finance shareholders would get 90c in shares for every $1 invested, Hanover Finance secured debenture holders would get 78c and Hanover subordinated noteholders and bondholders 30c.
Hanover Finance directors said the offer was in the best interest of shareholders, as they did not think there was any possibility of getting more under the present debt restructure plan. An independent report from Grant Samuel reached the same conclusion.
But accountant Warwick Grieve said Allied Farmers shares would tumble if this was approved, and they only had $10 million in equity and had lost $35m last year.
"The only answer is receivership," he said.
"The receiver's fee won't be $20m, and the receiver can't force a firesale."
He urged the moratorium to continue, "because before long the trustees will put it into receivership".
Another investor said he would not invest in Allied if he had cash, and there was no prospect of getting a reasonable return on shares quickly.
"Will the receivers get me more? I don't know, but I am prepared to take the risk," he said.
"At least I'll get a fair deal, there will be no kissing by favour, no higgledy piggledy as we have seen."
Allied Farmers managing director Rob Alloway said his company had done remarkably well to stay in business and its finance division had gone from the 34th biggest in New Zealand to the sixth.
Investors were voting by 1pm and a result was expected to be announced by 2.30pm.
NZPA