HGH - Heartland Group Holdings

[percy]

The reason MTF works (IMO) is that the business is full recourse to the dealer who then gets the lion share of the profit. Change that model and you break it. Dealers invariably have several financiers to whom they place business and select deal by deal where to put the paper. The other observation I would make is that the assets are high quality because the Dealers only put the best business on a recourse basis - as you would. With NTA of $1.81 or so, the Turners and Heartland offers are well below NTA. Can see $2 being paid by the time this is over. Peanuts, popcorn.... The big assumption here is that MTF will allow a shareholder over 10% -without that, nothing happens.

MTF was formed by car dealers, who at the time could not arrange finance for their customers' via finance companies.
In some ways the business may have run its course, and a lot of those dealers would like their capital out.
I think "the noise" we are hearing,ie MTF not interested in HNZ's proposals,HNZ are the competition are far from being correct.I would think most dealers would see TNR as their competition,and I think the majority of MTF shareholders would be keen sellers into a takeover.

[Plutus]

MTF was formed by car dealers, who at the time could not arrange finance for their customers' via finance companies.
In some ways the business may have run its course, and a lot of those dealers would like their capital out.
I think "the noise" we are hearing,ie MTF not interested in HNZ's proposals,HNZ are the competition are far from being correct.I would think most dealers would see TNR as their competition,and I think the majority of MTF shareholders would be keen sellers into a takeover.

HNZ are doing DD, but I think its a bit more complex than that. The biggest originators for MTF are now the brokers not the dealers, and MTF's largest originator overall is actually Turners (around 10% I understand). If Heartland or Turners acquire MTF, I could see Dealers and Brokers going elsewhere, so yes you're right, maybe its run its course - so what are they buying, a good ledger and database but with an 18 month average run off ?? And why would shareholders take less than NTA ? Turners will be on the phones flat out accumulating shares as fast as they can.

[McD]

Just noticed the Head of Rural Banking is no longer on the web-site - can't see an NZX announcement - did I miss something ?

[percy]

HNZ are doing DD, but I think its a bit more complex than that. The biggest originators for MTF are now the brokers not the dealers, and MTF's largest originator overall is actually Turners (around 10% I understand). If Heartland or Turners acquire MTF, I could see Dealers and Brokers going elsewhere, so yes you're right, maybe its run its course - so what are they buying, a good ledger and database but with an 18 month average run off ?? And why would shareholders take less than NTA ? Turners will be on the phones flat out accumulating shares as fast as they can.

I guessing a lot here.Should HNZ takeover MTF I would expect they would be able to retain most dealers/originators and maybe even Turners.
I think Turners should get to 10% easily, as the price offered is a lot higher than the 90 to 95 cents price range MTF has traded at over the past year,and I think there are a lot of willing sellers..
It is what happens to the 80% to 90% of MTF shareholders who are locked in to MTF should HNZ walk away. Turners are in no position to make a full takeover.
The value of MTF shares will drop considerably.
Would a lot of dealers just transfer their business elsewhere further eroding the value of MTF.?

[Plutus]

I guessing a lot here.Should HNZ takeover MTF I would expect they would be able to retain most dealers/originators and maybe even Turners.
I think Turners should get to 10% easily, as the price offered is a lot higher than the 90 to 95 cents price range MTF has traded at over the past year,and I think there are a lot of willing sellers..
It is what happens to the 80% to 90% of MTF shareholders who are locked in to MTF should HNZ walk away. Turners are in no position to make a full takeover.
The value of MTF shares will drop considerably.
Would a lot of dealers just transfer their business elsewhere further eroding the value of MTF.?

I see Turners as direct competition to Marac/HNZ so they for one would leave. The only reason they are putting business into MTF would be to 'share up' past the 10%. I agree the MTF ownership model is not perfect, but the value to active shareholder originators is not just the dividend but the up front volume based profit share which they wouldn't get under HNZ. Turners could offer a takeover based on part shares / part cash if they didn't have the balance sheet. Interesting game to watch. Advantage Turners, but Heartland yet to serve.

[beetills]

Turners have 7.6% of MTF shares according to their latest announcement.

[iceman]

So MTF originators are not exactly jumping at the opportunity to sell to TNR ! This game has a long way to go yet but my money is on HNZ getting what they want

[winner69]

BNZ say their rural loan book is 'extremely sound' but I note HY have put aside 'a big pile of cash for potential bad debts' (as The Herald put it)

I think HNZ actually reduced their provision in rural sector last financial year.

No worries though. If there is going to be a big bad debt problem it won't come out to late next year at the earliest and by then the share price will be 160 anyway.

Share price still going OK at the moment - 130 soon methinks

[stoploss]

BNZ say their rural loan book is 'extremely sound' but I note HY have put aside 'a big pile of cash for potential bad debts' (as The Herald put it)

I think HNZ actually reduced their provision in rural sector last financial year.

No worries though. If there is going to be a big bad debt problem it won't come out to late next year at the earliest and by then the share price will be 160 anyway.

Share price still going OK at the moment - 130 soon methinks

Would have been a bit embarrassing , and Winston Peters would have got on his high horse re excessive profits by offshore banks if they hadn't tucked a wee bit away ......

[McD]

HNZ v Turners. Would get interesting odds at the TAB. Place your bets.

So MTF originators are not exactly jumping at the opportunity to sell to TNR ! This game has a long way to go yet but my money is on HNZ getting what they want