Pacific Retail picks its preferred bidder
Pacific Retail Group (PRG) says it is close to a deal on the sale of its consumer finance group.
Wednesday, August 31st 2005, 11:37AM
The investment company has selected a preferred bidder, and expects to make an announcement early next month.
The bidder's identity and offer price remain under wraps while due diligence is being carried out, chairman Maurice Kidd told shareholders at PRG's annual meeting yesterday.
PRG shelved plans to float the consumer finance arm in June, citing fears about investors' appetite for a new issue in a weakening sharemarket. The sharemarket has since recovered, with the benchmark top 50 index touching an all time high of 3407.27 on August 23.
The finance business -- comprising Pacific Retail Finance, Pacific Retail Services, Montreal Financial Services, and new addition Simply Insurance Ltd, acquired in April -- is a solid performer.
Entrepreneur Eric Watson, who owns 81.3% of PRG, had hoped to keep a majority shareholding via a sharemarket float.
In March, PRG's advisor Macquarie told the firm it would only get full value if it sold the business outright.
Some market commentators took this to mean that investors were wary of Watson, who se track record for treating small shareholders fairly is blemished. PRG is selling the finance business because it needs cash to prop up its money-hungry electrical goods chain, Powerhouse. Its other major investment, lingerie-maker Bendon, also needs money to grow.
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