REL: 0917 HRS Motor Trade Finances Limited
MEETING: MTF: MTF provides more information for special meeting
The Board of MTF has become aware that Heartland New Zealand Limited or MARAC
or their agents (HNZ), has been engaging with selected MTF shareholders. The
Board believes this engagement is related to a recent proposal by HNZ to
acquire MTF that was rejected by the MTF Board for reasons outlined below. In
the interests of ensuring all shareholders are equally informed, and
correcting any misinformation that may exist across the MTF shareholding
base, the Board believes that shareholders should be aware that:
- HNZ had approached the Board of MTF over a considerable period regarding
the prospect of making an offer to acquire MTF. These approaches culminated
in an undated draft written proposal from HNZ received early May 2014. After
taking legal and commercial advice, the Board formed the view that the
proposal in the form received was without merit, as to the indicative price
and in other respects. The proposal was incomplete, highly conditional and
incapable of acceptance. After taking advice, the Board formed the view that
the proposal did not require disclosure, at that time
- the nature of the proposal from HNZ revealed that HNZ holds a materially
different view than MTF's Board as to the potential impact on MTF from the
High Court case brought by the Commerce Commission, in which the High Court
finding of breaches of the Credit Contract and Consumer Finance Act 2003, in
respect of credit fees charged in 39 credit contracts originated by Sportzone
Motorcycles Ltd (in liquidation), , is subject to appeal at the Court of
Appeal
- the Board offered to engage further with HNZ to see if an appropriate
proposal that could be put to shareholders could be agreed. This would have
involved sharing MTF's confidential information regarding the Commerce
Commission case, and other information, with HNZ under appropriate
confidentiality
- we failed to agree a basis for moving forward with HNZ. HNZ was not
prepared to accept confidentiality arrangements and undertakings which, given
HNZ is a direct competitor of MTF, we regarded as appropriate and HNZ has
failed to indicate a willingness to re-consider its indicative price.
- as a consequence, formal discussions were terminated
- the Board is aware that HNZ has been engaging with selected MTF ordinary
shareholders. As mentioned in our announcement on 16 July 2014, MTF has
received a letter from a group of ordinary shareholders, requesting that MTF
convenes a special meeting of ordinary shareholders to consider certain
resolutions. The resolutions effectively request the MTF Board to make
public the information that HNZ was seeking but would not enter
confidentiality agreements in regard to
- MTF believes the proposed resolutions and the supporting statement contain
some errors of fact and assumptions and has proposed to meet with the
proposing shareholders, prior to issuing a notice of meeting, to address
those errors and discuss their proposed approach more generally
- MTF expects to issue a notice of meeting setting out the resolutions, and
your Board's response to them, as soon as practicable after that meeting
- we will provide more detail when the notice of meeting is issued. In the
interim, shareholders should note:
- the Board of MTF wish to ensure that shareholders do not have misleading or
confusing information regarding the Commerce Commission issues and the
outlook for MTF, including as a result of communications from HNZ
- the Board has not viewed the communications between HNZ and selected
shareholders, but, based on the views expressed by HNZ to the MTF Board,
shareholders should know that the MTF Board does not agree with the
assumptions underlying HNZ's views and does not regard the proposal HNZ
recently presented to MTF as having merit for either MTF's shareholders or
originators, in its current form
- HNZ has no obligation to act in the best interests of MTF shareholders;
that is the role of your Board and we are very focussed on that in our
handling of this matter. Any views HNZ expresses about MTF's business or
financial position must be considered by shareholders in light of the fact
that HNZ is a competitor and potential acquirer of MTF, and will be acting
consistent with its own interests in communicating any such views about MTF
to MTF shareholders
- if HNZ wishes to make an offer for the shares in MTF, it should do so under
the Takeovers Code. If it wishes to develop a transaction proposal to take
to the shareholders and originators of MTF, the appropriate channel is
through the MTF Board, under appropriate confidentiality arrangements, and
not through selected ordinary shareholders. The Board is happy to work with
HNZ on a proposal that it considers has merit for shareholders and through a
process that is acceptable; to date no such proposal or process has been put
forward
- until HNZ is prepared to amend its proposal, we can only continue to regard
it as being without merit.
The Board will update shareholders if there are any meaningful developments
in relation to HNZ.
In the meantime, the Board strongly advises that shareholders:
- do not make any undertakings to any party regarding the pending Special
Meeting until after the Notice of Meeting and explanatory detail have been
issued;
- do not make any undertakings to HNZ or any other party in regard to their
MTF shares before the Board of MTF has received and reviewed any formal
proposal, taken proper advice and is able to make an appropriate
recommendation to shareholders;
- treat any communications from HNZ with caution, given that it is a
competitor and potential acquirer of MTF. In that latter capacity, HNZ has
an interest in raising unsubstantiated questions that may negatively affect
the value perception of MTF.
The next steps for the Board of MTF are:
- meet with the proposing shareholders in relation to the special meeting and
the resolutions they wish to put;
- issue a notice of meeting and further explanatory notes to MTF ordinary
shareholders.
In the meantime, if any shareholder has any questions or wants to discuss the
situation or any approach you may have had, please contact:
Angus Bradshaw 03 467 7988
abradshaw@mtf.co.nz
Glen Todd 03 474 6370
gtodd@mtf.co.nz
Yours sincerely
Stephen Higgs
Chairman
End CA:00252892 For:MTF Type:MEETING Time:2014-07-21 09:17:56
Originally Posted by winner69
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