Professional Documents
Culture Documents
Allied Farmers Announcement On Additional Info About Bonus Shares
Allied Farmers Announcement On Additional Info About Bonus Shares
Full details of the proposal which Allied Farmers Limited has agreed with Hanover Finance
Limited and United Finance Limited and which is conditional on shareholder and investor votes
are to be contained in the Notice of Meeting that Allied expects to send to its shareholders early
next week.
• Hanover and United investors holding secured deposits or secured stock have already
(under the DRP) received 6 cents per $1.
• Under the Allied Proposal the remaining amount owed to them by Hanover/United will be
reduced so that it matches the amount set out in the column 3 below (highlighted)
• Allied will pay that consideration in the form of new Allied shares. The number of shares
will vary depending on the issue price. The issue price will be set at 5 day VWAP1 over
the 5 trading days prior to the Hanover meeting which therefore means the price will
reflect the trading price on NZSX over that period.
1
VWAP = Volume Weighted Average Price
B. Potential scenarios for initial shareholdings
The relative initial shareholdings of existing shareholders and investors will depend on the issue
price of the new shares (set as described above). However, Allied has calculated the following
examples based on various possible2 outcomes:
Number of Shares
Existing Allied Farmers
shareholders 37,696,705 37,696,705 37,696,705 37,696,705 37,696,705 37,696,705
Number of Shares issued to
Holders 990,443,049 1,042,571,630 1,100,492,276 1,116,227,116 1,238,053,811 1,320,590,732
Total of shares on issue after
Completion 1,028,139,754 1,080,268,335 1,138,188,981 1,202,923,821 1,275,750,516 1,358,287,437
% Ownership
Existing Allied Farmers
Shareholders 3.7% 3.5% 3.3% 3.1% 3.0% 2.8%
New shareholders 96.3% 96.5% 96.7% 96.9% 97% 97.2%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
As announced, the existing Allied shareholders will be issued “Bonus Securities” for no
consideration which will ensure fair treatment of the existing and new shareholders.
An example of the calculation that would occur if the Shortfall was NZ$20 million is set out
below but (using the same numbers) you can describe the position as follows:
• at Completion, existing shareholder will hold 13m/(13m + 396m) percent of the company,
where 13m is the then market cap of ALF and 396m is the value of the finance assets
• if the assets end up being worth $376m then you need to end up in the position where
the existing shareholders own 13/(13 + 376)
• to achieve this the existing shareholders have to end up with more shares (which they
do not have to pay for)
• every new share increases the number of shares on issue and therefore getting the
percentage right is a bit of maths (but it works)
• the key is that the proportions are set by the value each group (existing shareholders
and investors) bring to the deal
2
Allied cannot predict whether the applicable calculations reflect the actual position that will apply as that is
dependent on future events.
• when the calculation is done, the variables (market price of ALF shares and discount
rate applied to Hanover/United assets) is kept constant so that the calculation only
reflects reduced cash in (from what was expected) or a reduced value of assets still held
in 2011.