Cullen limits takeover offer

By Phil Boeyen, ShareChat Business News Editor

Monday 5th November 2001

Shares in retail group Pacific Retail (NZSE: PRG) have fallen after the company's major shareholder, Cullen Investments, formally advised that it would not extend or increase its current takeover offer of $1.76 per share.

Cullen Investments subsidiary, Logan Corporation, announced a bid for 100% of PRG at the end of September but PRG's independent directors have advised their shareholders to reject the offer because it is undervalues the business.

An independent appraisal report said the fair value of the company is $2.54.

Cullen Investments MD, Phil Newland, says his firm made it clear at the outset that it was not necessarily seeking all of PRG, although the provisions of the Takeovers Code required it to bid for 100%.

"For that reason, our offer was not conditional upon any particular level of acceptances and, while we were prepared to purchase 100% of PRG as required by the Takeovers Code, we will be comfortable closing out our offer with a substantially increased shareholding."

In recommending that shareholders reject the Cullen offer the independent directors noted that there was a possibility that PRG shares could fall below the offer price of $1.76 if Logan does not achieve full ownership.

Mr Newland says this was a responsible approach by the independent directors, who were cognisant that the pre-bid share price stood at around $1.40 and that shareholders faced the risk of limited future opportunities for exit.

Cullen Investments has been critical of the appraisal price, claiming it was based on future revenue projections which had not been approved by the full board.

Pacific Retail Group includes the Noel Leeming, Computer City, and Bond & Bond franchises as well as finance subsidiary Pacific Retail Finance and homeware and gift chain Living & Giving.

Logan Corporation's offer for the company is due to expired on November 10th.

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