Offer 'insults' Bridgecorp directors

By Deborah Hill Cone

Friday 17th September 2004

Bridgecorp's Rod Petricevic wanted Dorchester Pacific managing director Brent King to pay him $500,000 for every month he did not "deliver" Bridgecorp a Dorchester board seat.

Details of this strange arrangement are included in a Takeovers Panel document setting out its reasons for ruling that it was not satisfied with transactions involving King and Petricevic.

The $500,000 directorship-or-fine clause was dropped from the final agreement, which saw Bridgecorp acquire 19.99% of Dorchester and a lock-up agreement over a further 5.05% owned by King.

But yesterday Dorchester chairman Murray Radford said the board would be getting together to discuss aspects of the document, including the sharing of information with Bridgecorp.

Radford said: "We are not entirely happy with parts of it," and described the $500,000 directorship-or-fine clause as far-fetched.

"I cannot believe [King] offered that. It's quite an insult to the other directors."

The 37-page Takeovers Panel lays bare details of the transaction including:

The deal which was said by the parties to have been concluded in three hours on Friday 13 had in fact been planned since early July;

Code names were used to keep the matter confidential cricket buff King was "Hadlee," Bridgecorp was "Bradman," Dorchester was "World Cup," shareholders Grant Banker and Hugh Green were "Fleming" and "Styris";

Petricevic was supplied confidential board papers leading him to tell his own board that Dorchester was projecting a profit of $8 million this year, a figure which has not been disclosed to the market;

Bridgecorp said it was "crucial" it was offered a board seat and wanted to gain a strategic advantage through a possible merger with Dorchester including a stock exchange listing;

King took a mortgage over a Queensland property called Posada to make up $8 million of his $20 million payout for his shares and warrants. This may have saved Bridgecorp a major writedown;

Bridgecorp was concerned about a mass walkout of staff as a result of its appearance on the company's share register.

Radford said the directors Sir William Birch, Barry Graham and Paul Burns would be getting together to discuss the findings once Birch returned from overseas this weekend.

Asked whether he would favour giving Bridgecorp a board seat, Radford said: "We will consider it. There has been no approach but it is not unreasonable for a 20% shareholder to make an approach."

Major Dorchester shareholders, who are usually full of praise for the performance of Dorchester and King's role, said they were angry that confidential information had been shared with Petricevic but not with them.

"It shows a tremendous lack of judgment ... It's out of character for Brent King," one significant shareholder said.

The takeovers panel is expected to release its remedies, or censure, within the next week. They may include orders that the 5.05% shareholding tied up with the lock-up agreement is forfeited.

Comments from our readers

No comments yet