PRG denies sale talk

By Deborah Hill Cone

Friday 19th March 2004

Pacific Retail Group chairman Maurice Kidd is cagey about whether the company is in talks to sell its finance arm.

Market sources said the division, made up of Pacific Retail Finance, Noel Leeming Financial Services and Pacific Retail Services, was in play, with acquisitive finance giant GE Capital mentioned as a possible buyer. A spokesman for GE Capital in Melbourne said the company would not comment.

PRG is listed but is essentially owned by its majority shareholder, London-based entrepreneur Eric Watson. When asked if PRG was selling Pacific Retail Finance, Kidd denied it. But asked if it might be in talks to sell its finance assets, he was more equivocal.

"We are an investment company and people approach us from time to time," he said.

If a deal was unconditional he would announce it to the market but would not comment before then, Kidd said. But he agreed "theoretically, yes." It would be possible to sell the finance division.

Last year national chain Farmers was split up in this way, with its retail assets bought by Pascoes and the finance business by Fisher & Paykel.

In its results for the six months to September last year, PRG said the finance division had a loan book of $389 million, made up of $246 million in receivables and $143 million in securitised receivables under management.

It is not clear from PRG's consolidated accounts how much equity is in the finance group only, but Pacific Retail Finance's prospectus shows at December last year it had shareholder funds of $18.2 million.

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