Hold on to shares despite offer, say Mike Pero directors

An independent adviser has found Mike Pero Mortgages shares are worth up to 20 per cent less than the price being offered in a takeover bid, but the company directors have told shareholders to wait.

A draft report from Horwath Porter Wigglesworth released yesterday values the shares at 88c to 95c.

New Zealand Finance and Australian firm Liberty Financial - who have formed joint venture MPMH Ltd to take over, delist and operate the listed mortgage broker - have offered $1.10 a share for the 5.4 per cent of the company they do not already own.

However, Mike Pero Mortgages' independent directors have advised shareholders to wait until the offer is formalised before taking any action in relation to their shares.

MPMH on Monday made a new offer under the same terms as its first after the initial plan hit a Takeovers Panel snag.

The first offer was to have opened next Wednesday, but the new offer gives MPMH some timing flexibility while it concludes "discussions" with the panel.

It is not clear what the Takeovers Panel's concerns are. NZ Finance managing director John Callaghan was unavailable for comment yesterday.

Last month independent adviser Staples Rodway found that MPMH's offer for Mike Pero Mortgages' share options was "fair and reasonable".

The options, which will expire at the end of this year, allow holders to buy shares at $1.20. Only a handful of people own the 65,000 options on issue.

Liberty specialises in providing loans to borrowers who do not meet bank lending criteria and, like NZ Finance, already provides financial products to Mike Pero.

Should the deal succeed, NZ Finance and Liberty will implement "various business arrangements" which will see Mike Pero Mortgages establishing a securitisation structure to originate Mike Pero-branded mortgages and new financial products.

Shares in Mike Pero Mortgages last traded at $1.08 and NZ Finance shares last traded at $1.65.