Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Turners board backs takeover bid

Turners board backs takeover bid, valued at bottom of adviser's range

By Paul McBeth

Sept. 29 (BusinessDesk) - The independent directors of Turners Group NZ, formerly Turners Auctions, are backing an offer to take over the car auction firm, which is at the bottom of an independent adviser's valuation range.

The Turners board has endorsed the $82 million bid by Dorchester Pacific, saying the $3 a share offer was within the valuation range put forward by Grant Samuel in its report, no other offer had been made, and that the finance company already held about 41 percent of the firm's shares and was likely to take a controlling 50 percent stake, it said in a statement. Dorchester is offering either $3 a share cash, two-year notes that pay interest of 9 percent and convert to Dorchester shares, ordinary shares of Dorchester or any combination.

The deal is conditional on Dorchester achieving at least 50.1 percent, which would then trigger a requirement for Turners to pay a fully-imputed special dividend of 15 cents per share.

Grant Samuel valued Turners at between $2.97 and $3.27 a share after the payment of the special dividend, with the 9.1 percent premium to Turners' pre-offer trading price lower than the average incentive offered in successful takeovers of Australian and New Zealand listed firms, it said in its report. If the offer isn't successful, the Turners shares will likely trade below the $3 price.

The independent adviser's report said Turners investors who elected to take Dorchester shares at 25 cents apiece could receive more or less than the $3 per share offer, while those who took the bonds would receive an attractive interest rate for two years, after which time the notes could be converted to Dorchester shares or redeemed for cash.

Earlier this month, Dorchester said that a full takeover of Turners would be funded by $18 million of bank debt, $18 million of bonds, and $30 million from the issue of new shares. Should it only acquire an additional 50 percent of the company, taking its stake to 70 percent, about a third of the purchase would be funded via bonds and the rest via a share issue with no new bank debt.

Last month Turners lifted first-half profit 5.9 percent to $2.27 million on a 19 percent increase in revenue to $49.6 million.

Shares of Dorchester were unchanged at 25.5 cents today, while Turners stock last traded at $3.15.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Mycoplasma Bovis: More Properties Positive

One of the latest infected properties is in the Hastings district, the other three are within a farming enterprise in Winton. The suspect property is near Ashburton. More>>


Manawatū Gorge Alternative: More Work Needed To Choose Route

“We are currently working closely and in partnership with local councils and other stakeholders to make the right long-term decision. It’s vital we have strong support on the new route as it will represent a very significant long-term investment and it will need to serve the region and the country for decades to come.” More>>


RBNZ: Super Fund Chief To Be New Reserve Bank Governor

Adrian Orr has been appointed as Reserve Bank Governor effective from 27 March 2018, Finance Minister Grant Robertson says. More>>


ScoopPro: Helping PR Professionals Get More Out Of Scoop has been a fixture of New Zealand’s news and Public Relations infrastructure for over 18 years. However, without the financial assistance of those using Scoop in a professional context in key sectors such as Public Relations and media, Scoop will not be able to continue this service... More>>

Insurance: 2017 Worst Year On Record For Weather-Related Losses

The Insurance Council of New Zealand (ICNZ) announced today that 2017 has been the most expensive year on record for weather-related losses, with a total insured-losses value of more than $242 million. More>>