New takeover bid for Pacific Retail

By Phil Boeyen, ShareChat Business News Editor

Wednesday 15th May 2002

Eric Watson is having another stab at taking full control of retail, finance and lingerie company Pacific Retail Group (NZSE: PRG).

Pacific Retail Group announced late Wednesday that it had received a notice of intention from Logan Corporation to make a full offer for the company at $2.25 per share.

Logan Corp is a subsidiary of Eric Watson's private investment company, Cullen Investments.

The latest bid follows Logan Corp's failed attempt late last year to takeover PRG at $1.76 per share.

An appraisal report at the time valued the shares between $2.13 and $2.95 and came in for considerable criticism from Cullen Investments, which claimed that the financial assumptions underlying the appraisal were unverified.

Logan has now upped its September offer price by almost 28% to $2.25 per share but that still falls short of the $2.54 which last year's appraisal report said was a fair value for the company. That appraisal report was commissioned prior to PRG's purchase earlier this year of lingerie company Bendon.

Prior to last year's takeover offer PRG shares had been trading at $1.45 a share, which put the previous Logan bid at a 32% premium to the pre-bid price.

However PRG shares closed Wednesday at $2.49, making the new takeover offer a 10% discount to the pre-bid share price.

According to a notice issued earlier this month, Logan Corp holds around 77% of the shares in Pacific Retail.

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