Options takeover offer 'fair' for Mike Pero Mortgages

An independent adviser has ruled the takeover offer for share options in listed financier Mike Pero Mortgages "fair and reasonable".

A Staples Rodway report compared the offer for options and ordinary shares in Mike Pero and said the offer price for the options on issue fell within its estimated value range.

Mortgage broking and finance company New Zealand Finance and Australian lender Liberty Financial have agreed to form a joint venture to take over and delist Mike Pero. The two already hold 94.6 per cent and have offered $1.10 a share to mop up the remaining shares.

As well as 25 million ordinary shares on issue, Mike Pero had issued options to buy shares at future dates at a fixed price and it is that group of securities which Staples Rodway examined in its report.

It said its analysis was not of the merits of the takeover offer for ordinary shares but solely a report to analyse the fairness of the offer for the options.

A separate independent adviser's report on the takeover was due out soon.

The options in Mike Pero will expire at the end of this year and allowed holders to buy shares at $1.20. Only a handful of people own the 65,000 options on issue. NZ Finance and Liberty are offering 4c for every option.

Staples Rodway estimated Mike Pero's share options were worth .033c to 7c so the offer price of 4c for each option was within its target range. In estimating the valuation range, Staples Rodway said it had taken into account the volatility of weekly movements in Mike Pero's share price which ranged from 20 per cent to 50 per cent.

"There are few, if any, directly comparable listed companies offering similar products to those of Mike Pero Mortgages," it said.

"Mortgage Choice is an Australian based provider of mortgage broking and related financial services.

"The company provides advice regarding mortgage products offered by its panel of lenders to its residential mortgage customers and as such, has similar operations to those of Mike Pero Mortgages. Current volatility levels for share price movements of Mortgage Choice range between 24 per cent (10 weeks annualised rolling average) and 41 per cent (30 weeks rolling average)."

A report on fairness of the offer for ordinary Mike Pero shares will be issued soon.

The deal

* Mike Pero has two types of shares - ordinary shares under offer at $1.10 each and options under offer at 4c each.

* Staples Rodway only analysed the takeover deal on the options.

* Those options carry no voting rights and expire in December.