Dorchester lifts Turners Auctions stake to 19.85%; no plans to make offer

Monday 10th June 2013

Dorchester Pacific, the financial services firm whose shares have soared 237 percent in the past year, lifted its stake in Turners Auctions to 19.85 percent and said it has no immediate plans to make an offer for the company.

Dorchester is flush with funds after a greater-than-expected conversion of options and share placement this month raising about $21 million. The company has a potential acquisition to expand in financial services in its sights, though it is too soon to give details, chief executive Paul Byrnes told BusinessDesk.

The company agreed to buy an initial 18.2 percent of Turners from interests associated with Milford Asset Management in April and has lifted its stake near the maximum it can hold without making a takeover offer since then by buying shares on market. More than 65 percent of Dorchester's new lending is for motor vehicles and the company believes it could add "considerable value" to Turners in vehicle finance and insurance, it said in April.

"We're comfortable with that level of shareholding as we increase our understanding of the company," Byrnes said. "There's no intention at this stage to move higher."

Dorchester shares were unchanged at 30 cents, valuing the company at about $64 million. Turners rose 0.6 percent to $1.79.

Investors exercised 133.7 million of the 150 million options the company issued as part of a 2010 recapitalisation plan led by the Bakery Business, where some 7,200 investors owed about $84 million agreed to convert their debenture stock for four different types of security to keep the firm afloat.

Business Bakery holds 24.5 percent of Dorchester's expanded capital, while Matthew Harrison, the head of the EC Credit Control that the company acquired last year, will hold 8.5 percent.

BusinessDesk.co.nz

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