Bridgecorp buys 20% of Dorchester Pacific

By Jenny Ruth

Monday 16th August 2004

Dorchester Pacific founder Brent King has sold 15% of his company to Rod Petricevic's Bridgecorp.

Bridgecorp has also picked up sufficient shares from other Dorchester Pacific shareholders to take its stake to just below the crucial 20% mark.

Bridgecorp, which is a public but unlisted finance company specialising in property investment, is paying a huge premium at $4 a share, or $16.7 million, compared with the current share price of $2.80 to gain the stake. The deal will make Bridgecorp Dorchester Pacific's largest shareholder.

Petricevic agrees that his company has long had ambitions to become a listed company but says it is too soon to regard Dorchester Pacific as a backdoor listing vehicle. "We've taken what we call a strategic investment," Petricevic says.

If Bridgecorp wants to increase its stake beyond 20%, it will have to make an offer to all shareholders.

While he hasn't had access to all Dorchester Pacific's financial details and files, "it's a matter of seeing whether there are some synergies there, whether there are some savings that can be made. We're pretty impressed with Dorchester Pacific generally."

While Bridgecorp's business is all property based, Petricevic estimates only about 20% of Dorchester Pacific's is. "They have motor vehicle finance, consumer finance, share broking - there are a number of things there that interest us. Whether things can be done to add value for all shareholders is something we have to look at as we go forward."

Significantly, Dorchester Pacific chairman Murray Radford said in a statement that his company's director, except for King, "have had no contact with representatives of Bridgecorp but expect to do so in the near future."

King says he hadn't been thinking of selling any shares until Bridgecorp approached him and that he decided to sell for personal reasons.

"I was at the top of a staircase and I thought if I fell down the stairs, what would my kids do," King says. He has four children, two girls and two boys aged between nine and 16.

King will retain a little over 5% of Dorchester Pacific, which he founded in 1985 and took it public in 1991 through a reverse takeover of Venture Pacific, a Jarden's company which was then just a shell. It has since grown into a diversified financial services company with a current market value of $58.6 million.

Despite reducing his stake, King says he intends to remain Dorchester Pacific's managing director.

Bridgecorp, which reported a $2.7 million net profit for the six months ended December when it had $52.1 million in shareholders' equity, has tried to become a listed company before but has been turned down by the New Zealand Exchange and Petricevic is on record as blaming this on his past. A former partner of Sir Michael Fay and David Richwhite, Petricevic founded Euro National which listed in 1985 but then went on to be among the number of companies to suffer in the 1987 share market crash. It posted a $255 million loss in 1998, the year Petricevic resigned from the board and sold out, but never actually collapsed and is now part of the CDL Hotels group.

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