5 Apr 2013

Dorchester Pacific to buy large stake in Turners Auctions

7:02 am on 5 April 2013

Dorchester Pacific is planning to buy a large stake in Turners Auctions for $9.1 million.

The finance firm and insurer is acquiring the 18.2% stake held by Milford Asset Management for $1.82 a share. It will pay 5 cents a share upfront and the balance in the middle of June.

Early last month, shares in the motor vehicle trader tumbled heavily after it lost a contract with IAG to sell damaged cars worth more than 15% of its profits. Chief executive Graham Roberts had quit suddenly the previous week.

Dorchester chief executive Paul Brynes says there is a natural link between the two firms, since two-thirds of Dorchester's new lending is for private and commercial motor vehicles.

He says it's a long term investment and Dorchester Pacific wants to provide end-to-end finance and is seeking more control at the finance origination end after acquiring EC Credit.

Mr Byrnes says Dorchester Pacific can work better in partnership when its interests are aligned as a shareholder.