PRG makes Bendon takeover offer

By Phil Boeyen, ShareChat Business News Editor

Friday 18th January 2002

Pacific Retail Group (NZSE: PRG) has moved swiftly to a full takeover offer for Bendon (NZSE: BEN) although it says it will settle for a majority holding.

PRG announced on Wednesday it had taken a 15.5% stake in the group at $2.00 per share and later this week announced it had also acquired an option over further 3.55% at $1.90.

Late Friday the company revealed its intention to make an offer for 100% of the shares at $1.90 per share through a wholly owned subsidiary, Pacific Retail Apparel Limited.

PRG says the move follows confirmation by Bendon Group's directors that they will allow it to undertake due diligence, together with other interested parties.

The appliance and computer retailer says it is launching the takeover bid from a substantial platform and the price being offered represents a premium above the current management buyout offer, which, according to Bendon's board, would effectively return approximately $1.81 per share to shareholders.

PRG director and Cullen Investments MD, Phil Newland, says the company was encouraged to proceed after a constructive and positive meeting with Bendon's independent directors.

"Our offer would provide Bendon shareholders with an attractive, certain and immediately realisable proposition. At $1.90 per share PRG's offer would be significantly higher than either the management buyout proposal or other indicative offers to purchase the company's assets, for which both AMP Henderson and the board have stated their support.

"Moreover, it is a less risky proposition for shareholders in that they know exactly how much they will receive for their holdings and will not be waiting on a potentially protracted winding up process."

Although the offer will be for 100% of Bendon Mr Newland says it is not conditional on actually attaining 100%.

"While PRG's preference is to own 100% of Bendon Group it would also be very satisfied anywhere above the minimum threshold of 50% required under the Takeovers Code".

"Our primary intention is to gain operational control of Bendon and grow its value, as we have done with PRG."

Mr Newland says the company filed notice on Friday because it "wanted to get the clock running on the notice and pause period as soon as possible."

"A final decision regarding making the offer will be made within the period prescribed under the Takeovers Code."

Cullen Investments subsidiary, Logan Corp, made a full takeover bid for PRG last year but ended up increasing its holding by only 10% to around 73% after its offer price was deemed unfair in an appraisal report.

Bendon boss Hugo Venter made the first play for Bendon Limited last November and has the support of major shareholder AMP Henderson.

However there is also another bidder in the wings, which the National Business Review named on Friday as wealthy Australian businessman, Solomon Lew.

Mr Lew is currently a partner in a bid to buy the failed former Air New Zealand (NZSE: AIR) subsidiary, Ansett, and is reported to have interests in other fashion businesses.

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