Dorchester Acquires 25% Stake in St Laurence

Media Release
28 March 2007

Dorchester Acquires 25 Percent Stake in St Laurence Limited

Listed financial solutions provider, Dorchester Pacific Limited (“Dorchester”), has expanded its reach into the property finance and the fund and asset management markets with the acquisition of a 25 percent stake of St Laurence Limited, for an investment of $29.6 million.

From today, Dorchester will own 25 percent of the shares in St Laurence Limited, a property-based investment and finance group of companies, which manages more than $1 billion in assets for over 16,000 investors. The transaction includes various put and call options, the details of which are outlined in the section entitled “Transaction Mechanics” below.

To fund the transaction and as part of forming the new strategic partnership, the shareholder of St Laurence Limited, St Laurence Mortgage Holdings Limited, has taken a stake in Dorchester via the issue of 4,767,891 new shares in Dorchester. The new shares will be issued at $2.05 and will represent a 13.04 percent post-issue holding in Dorchester. The balance of the purchase price ($19.8 million) has been paid in cash.

The St Laurence acquisition signals a change in direction and focus for Dorchester, further diversifying its financial services business and increasing its capability in the property finance, financial product development and fund and asset management sectors in which St Laurence operates.

Chief Executive Officer of Dorchester, Mr Andrew Walker, commented: “We are delighted with the opportunity to become a cornerstone investor in St Laurence. We have been looking to strengthen our position in the property finance and the fund and asset management markets, and we see this investment in the experienced and respected operator, St Laurence, as providing us with a strong foothold in this sector.

“While the merits of this investment stack up on a standalone basis, there are significant benefits for both companies from increased scale, distribution, geographical reach and product diversification; both management teams are committed to working together to assess a number of future options including the potential for a full merger.

“With the proven ability of St Laurence to develop and market financial products, and given the anticipated market changes driven by KiwiSaver, along with the continued trans-Tasman alignment of commercial property yields and values, we believe there will be a significant future uplift in the value of our investment."

St Laurence Limited Managing Director, Kevin Podmore, said: “I am pleased to have Dorchester as a new strategic investor and in turn to have acquired a significant stake in Dorchester Pacific Limited. We have been impressed with Dorchester’s direction under new Chief Executive Andrew Walker, and look forward to working with Andrew and his management team.

"St Laurence expects to be able to leverage its expertise and Dorchester’s wider client base to further enhance its footprint in the financial services industry."

Mr Podmore continued: “Dorchester has a diversified financial services business and a strong investor base, both of which will assist us in increasing our position and exposure in the market.

“There are significant synergies to be realised through this transaction and we are excited about the opportunities it presents for St Laurence and Dorchester, both operationally and strategically.

“But equally important, the cultural fit between the entities is very strong. At St Laurence, our investors come first, and we have looked for a new partner that fits our culture and direction, provides synergies with our existing business and adds future value to our investors."

Mr Barry Graham, Chairman of Dorchester and Andrew Walker, will both become nonexecutive directors on the St Laurence Limited board. Kevin Podmore, Managing Director of St Laurence Limited, will take up a position as a non-executive director with the Dorchester board.

Dorchester Pacific Limited is a financial solutions group, operating businesses in three divisions – Finance, Insurance and Savings, and Investment Services – and is listed on the NZSX.

The Finance division provides finance for property, motor vehicles, equipment and personal loans on a secured basis to businesses and individuals across New Zealand. To fund its operations, the Finance group raises secured and unsecured deposits from investors under trust deeds and registered prospectuses.

The Insurance and Savings division offers a range of specialised insurance and savings products, including group life policies, reverse annuity mortgages (RAMs), savings plans, superannuation, funeral plans and individual investment plans.

Investment services provide investment advice to clients, including portfolio reviews, custodial services and product recommendations. In addition, resources from within the group and other sources are used to provide professional and innovative financial services to clients requiring capital.

St Laurence is a property-based investment and finance group of companies. From small beginnings in 1995, when it was founded by managing director Kevin Podmore, the group has grown steadily and prudently and, as a result of that growth now manages more than $1 billion in assets for over 16,000 investors.

The experienced team at St Laurence Limited manage a selected range of specialised Australasian investment vehicles and funds. The focus is on four main areas of activity:

• Funds Management

• Asset Management – of the group's property investments

• Lending – property finance to selected clients

• Fund Investment

All four areas of the business are based on our core expertise and business focus – property. Investors take comfort in St Laurence’s considerable experience and expertise in property investment, property development and management, and property lending – and the Company is recognised and trusted by investors as having integrity and vision.

St Laurence has offices in Wellington (Head Office), Auckland, Christchurch and Sydney.

ENDS

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