29 Jul 2014

Dorchester Pacific in Turners bid

8:27 am on 29 July 2014

Dorchester Pacific has launched an $82 million-plus takeover offer for the car auction company Turners Auctions, describing it as a good fit for its insurance and finance business.

The company is offering $3 a share, or several more complicated alternatives.

Dorchester already owns 20 percent of Turners and has reached an agreement with Bartel Holdings, to buy its 20.8 percent stake.

The rest of Turners' shares are widely held. Shares in Turners rose 30 cents to $3.05 on Monday.

Dorchester chief executive Paul Byrnes said Turners' shareholders have a number of options. He said his company's offer was unconditional.

"We do believe that we can add value to the business by increasing the finance and insurance offer in particular."

Although he said Dorchester was happy with the way the business was going and the changes made by current management, the extra funds would give it a boost.

"Our shareholder funds will be over $100 million after this capital raise compared with Turners shareholder funds of about $18 million - you can just add more horsepower to that business and grow it quicker."

He said Dorchester would raise between $25-27m in a share issue, including the shares the Turners shareholders take up.

"Bartel have agreed to take 60 percent of their consideration in shares. We'll also issue around $15m worth of convertible notes."

He said that would be $40m of funding and the company would look for bank funding to make up the balance.