Lew moves to nab Bendon's knickers

By Deborah Hill Cone

Friday 18th January 2002

BRA WARS: Nicky Watson's husband, Eric, has made a play for the bra and knickers company

Australian tycoon "Solly" Lew was yesterday identified as the third bidder for in-play lingerie marketer Bendon Group.

The battle for Bendon this week developed into a down-and-dirty stoush as the Lew bid joined a proposal from Bendon management backed by 26% shareholder AMP Henderson and a takeover bid from Eric Watson's Pacific Retail Group .

Solomon Lew, who with partner Lindsay Fox headed the Tesna consortium to buy Ansett, has widespread fashion industry investments.

He is believed to have put together a Bendon consortium with a partner - possibly including the hosiery manufacturer Kayser.

Mr Lew also owns 10% of retail chain Country Road and his son, Peter, runs fashion retailers French Connection and Witchery.

It is not the first time Mr Lew has expressed an interest in Bendon. Several years ago an investment bank acting for Mr Lew wrote to Bendon expressing interest in buying the company but that deal fell through.

Appliance retailer PRG on Tuesday bought a 15.5% Bendon stake from fund manager Tower for $2 a share and on Thursday revealed it had an option to buy an additional 3.55% from Axa at $1.90 per share.

The option expires at the end of this month.

The proposal put forward by managing director Hugo Venter and AMP Henderson is valued at $1.81-1.84 per share depending on the amount of cash in the company.

It is bidding only for Bendon's operating assets, which it values at $38.5 million, but Bendon also has $17.5 million in cash, which the consortium proposes to distribute to shareholders pro rata.

Analysts say the bid does not give full value to Bendon's goodwill and a Grant Samuel appraisal report is due late this month.

Valuing a marketing company such as Bendon is a tricky exercise, when as in advertising, the company's people are among its biggest assets.

"Our business is about brands and people - one cannot survive without the other," Mr Venter said.

If either the PRG or Lew bid succeeds the buyers are likely to find they lose key management talent, including Mr Venter - a potentially serious problem in a marketing-based industry that depends on relationships with stockists.

Senior management figures including marketer Kay Cohen have signed up to the Venter proposal, which is also supported by supermodel Elle Macpherson.

It is not clear whether Ms Macpherson's five-year contract for her branded underwear line gives her the option to opt out under a change of management.

Appliance retailer PRG has no apparel experience but insists it is serious about buying the business.

"It's a bit opportunistic really but we do operate in the consumer space, we understand customers, we understand customers, sales management and marketing," PRG chief executive Peter Halkett said.

Mr Venter said the battle to own Bendon was good news for shareholders, who stood to benefit from the interest in buying the company.

But he was relaxed that his own proposal would only succeed if the price was right.

"It's a commercial transaction. We'd like to have Bendon but will not have Bendon at all costs," Mr Venter said. For the Venter/AMP bid to succeed it needs approval from 75% of Bendon's shareholders, not including AMP Henderson.

But on the other hand, so does the PRG bid.

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