Turners Auctions takeover bid
Finance company Dorchester Pacific will make a full takeover bid for car auction business Turners Auctions.
Dorchester said today it would offer Turners shareholders $3 a share, convertible notes, Dorchester shares, or a combination of all three.
Dorchester will also be seeking a special dividend of 15 cents per share to existing Turners shareholders, if its stake in the company passes 50 per cent.
The finance company, a 19.9 per cent shareholder in Turners, announced today that it had agreed to buy out the 20.8 per cent stake of Bartel Holdings, taking its total stake to 40.7 per cent.
It will pay Bartel a combination of 60 per cent Dorchester ordinary shares and 40 per cent convertible notes, in a deal conditional on the takeover proceeding.
The takeover offer does not require any particular threshold other than achieving at least 50.1 per cent control as required by the Takeovers Code.
Dorchester chief executive and executive director, Paul Byrnes, said funding for the acquisition will be a combination of a share placement, the issue of Convertible Notes and some bank funding.
"We anticipate raising between $25 million and $27.5m at 25c per share through the issue of Dorchester shares to Turners shareholders, including Bartel, and a placement.
"We also expect to issue around $15 million of convertible notes including to Bartel. Final numbers will of course depend on the level of acceptances and the combination of shares, convertible notes and cash options taken up by Turners shareholders."
It is expected that a formal takeover notice will be issued during August.
Byrnes said there was a natural synergy between the businesses of Dorchester and Turners.
"Seventy per cent of our finance lending is for motor vehicles and our insurance business has a focus on motor vehicle related insurance products," he said.
"We have also signalled our interest in participating in the origination or ‘front end' of an end-to-end financial services business. And, at board level, we have been very supportive of Turners' multi-channel strategy."
Shares in Turners Auctions last traded at $2.75 per share, giving it a market capitalisation of $75m.
The Dominion Post