Takeover target Mike Pero Mortgages has reported an almost 20 per cent rise in first-half profit, giving investors food for thought as suitor New Zealand Finance Holdings (NZF) launches its second takeover attempt today.
The mortgage broker reported a net after tax profit of $952,231 for the six months to
December 31, a rise of 19 per cent on the same period a year earlier.
Chief executive Jeff Staniland said the result was driven by record monthly demand for residential mortgages.
The company put through an average of $130 million a month in mortgages during the period, compared with $107 million a month a year earlier.
With the summer and early autumn months traditionally the strongest time for home buying, Mike Pero was on track to post a full year profit in line with an earnings guidance of $1.9m issued in December, Mr Staniland said.
Shares in Mike Pero, which announced a dividend of 3c per share, closed yesterday at $1.03 -- just shy of NZF's $1.05 per share offer.
The terms of the offer include a provision that if a dividend is paid after January 31, the price per share will be reduced by the amount of the dividend, meaning NZF's takeover offer is effectively $1.02 per share.
NZF bought a 54 per cent stake in Mike Pero from Gould Holdings for 82c per share in November, sparking a full takeover offer that netted just one per cent of the company.
It revealed details of the fresh bid on January 31.
The takeover heated up last week, when Australian lender Liberty Holdings jumped into the market and grabbed a 10.1 per cent blocking stake at $1.10 per share.
The pair appeared happy to work together, however, with NZF managing director John Callaghan saying the bid was not conditional on obtaining 90 per cent -- the threshold at which it would trigger a compulsory takeover of all minority shareholdings.
Liberty already provides finance to both NZF and Mike Pero and was expected to seek a seat on the Mike Pero board.
Mr Staniland said Mike Pero had not yet heard from Liberty and had been given no indication of its motivation for buying the stake.
Mike Pero has appointed two independent directors, chairman chairman Humphry Rolleston and Abigail Foote, to oversee the NZF takeover.
- NZPA
