Thursday 29th of March 2007

It's not often I get shocked by an announcement in this industry of ours. But yesterday's deal between St Laurence and Dorchester is a show-stopper.

Who would have thought that these two would get together? Certainly not me, and from the many people I have talked to I am not alone on this.

My take on this is that the deal has some logic to it. For some that is difficult to comprehend as all the Dorchester suitors named previously have been Bridgecorp and Hanover. Confusing the situation is that shareholding of Dorchester which includes a passive holder in Hugh Green (17%), Bridgecorp (17%) whose holding is currently in hock to St Laurence, former chief executive Brent King (9%), and St Laurence (13%).

St Laurence is probably in the box seat as it has lent money to Bridgecorp and has control over its stake, plus it has an agreement to pick up more of the company.

I couldn't get hold of St Laurence's Kevin Podmore last night (who I know quite well). But I did speak to Dorchester's Andrew Walker - who I don't know.

Walker impressed me.

Clearly Dorchester, under his captaincy, has changed course significantly and is sailing off in a new direction.
This is what the market is confused about as they still see Dorchester under the reign of Brent King. They still think of the boardroom stoush. And they still think of the Bridgecorp deal King tried to do.

My suggestion to you is throw away your old perceptions of Dorchester.

While Dorchester has played in the consumer lending area and car finance it is moving away from here. This is well-explained in this Good Returns story.

However the challenge will be executing the deal.

Podmore is a straight up guy and who does things well and doesn't cut corners. My guess is he can see things far more clearly than you or me.

Also I suspect that he and Walker are a good fit. One comment made was that there was a "karmic" feeling between the two.