Heartland weighs offer to trump Turners' MTF bid

Heartland New Zealand says it may pay $1.50 a share for between 10 per cent and 20 per cent of Dunedin-based MTF. Photo / File

Heartland New Zealand, the listed bank, says it may offer to pay 30 per cent more than financial services firm Turners to buy a cornerstone stake in auto-financier Motor Trade Finances.

The Auckland-based lender says it may pay $1.50 a share for between 10 per cent and 20 per cent of Dunedin-based MTF, and reaffirmed its interest in a full takeover provided it can reach agreement with the finance company's board.

The offer trumps Turners' offer to buy up to 20 per cent of MTF at $1.15 a share, which closes at the end of this week. MTF's shares last traded at 99c 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 had accepted Turners' bid could change their mind under the cooling off period required under law.