Duncan Saville-controlled Resimac has pledged $7 million in capital to support Allied Farmers' plans. Photo / Mark Mitchell

Duncan Saville-controlled Resimac has pledged $7 million in capital to support Allied Farmers' plans. Photo / Mark Mitchell

A well known and "trusted" company is likely to offer Hanover and United investors a competitive alternative to Allied Farmers' debt-for-equity proposal within a few days, according to a source working with the potential bidder.

The prospect of a rival offer emerged as interests associated with Infratil's largest shareholder, Duncan Saville, were revealed as the mystery investor backing Allied Farmers as it bids for Hanover and United Finance's assets.

Allied Farmers yesterday confirmed Resimac, Australia's largest funder of non-bank lenders, is the investor it said in September had agreed to provide $7 million in new capital.

Saville, who holds just under 20 per cent of Infratil and just under 25 per cent of its management company (Lloyd Morrison's HRL Morrison & Co), controls Resimac via his Ingot Capital Management.

Resimac's investment is via the acquisition of a combination of convertible notes, perpetual bonds and warrants issued by both Allied Farmers and finance subsidiary Allied Nationwide Finance.

Allied Farmers chairman John Loughlin said the "Resimac alliance" was "intended to assist in the objective of significantly expanding the finance business and would be especially valuable in the bid to acquire and subsequently manage the assets of Hanover Finance and United Finance".

However, a market source told the Business Herald they were assisting another entity preparing a separate proposal, "which involves a superior capital structure and probably superior outcome".

"They [Allied] are not actually putting in much money. Duncan Saville's pumping in $7 million which is not much in the overall scheme of things.

"A far more credible party is looking at putting in more money and saying to investors 'you can rely on our track record as having done the right thing by investors for a very long time'."

The source said there was "a reasonably good chance we'll have something on the table in three or four days". He said the potential offer would come from "a name that's very well known to New Zealanders and very trusted".

While Resimac's initial Allied investment is $7 million, given that it specialises in funding non-bank lenders via securitisation or packaging up loans into bonds for sale to investors, it has the ability to provide Allied with significant support.

At present it has A$3.5 billion ($4.42 billion) in securities on issue and its latest offerings have been covered by the Australian Government's wholesale deposit guarantee.