By Jenny Ruth
Friday 18th November 2005
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The Auckland-based finance and mortgage broking company has already reached an agreement with Mike Pero's 54% shareholder, Christchurch businessman George Gould to accept the takeover offer within three business days after the offer has been dispatched.
NZ Finance plans to offer 82 cents a share and 2 cents an option for the rest of the company.
Mike Pero shares were trading at 76 cents ahead of the proposed offer being announced.
The company was floated in May 2004 at $1 a share, valuing the company at $25 million. Mike Pero employees and franchisees were offered up to 800,000 free options exerciseable at $1.20 before November 2006, getting one free option for every share they purchased. There were 645,500 options issued, meaning the NZ Finance offer values the company at $20.63 million.
NZ Finance has previously made it clear that a major aim is to increase its distribution capability and this takeover is consistent with that objective, although managing director John Callaghan isn't saying much at this stage.
"There's a formal process that we have to go through so I don't feel it's appropriate to comment at this point in time," Callaghan says.
Given that Gould has already agreed to sell, NZ Finance already has effective control. Under that agreement, Gould will receive just over $11 million for his stake.
In March last year ahead of the float, Gould bought the Mike Pero Mortgages business from its founder of the same name for $15 million and Mike Pero bought back a 10% stake for $1.5 million which was diluted back to 6% as part of the float process.
Mike Pero shares haven't traded since the offer was announced but have been bid higher. New Zealand Finance shares last traded at 98 cents. NZ Finance floated in October 2004 at 30 cents a share, valuing the company at $20.7 million. Its current market capitalisation is $75.1 million.
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