Stock takes: We're happy to help out, Dr Morgan

Outspoken fund manager, economist and international motorcyclist Gareth Morgan had to pulp the first print run of his new book, After the Panic, it was reported three months ago.

In the book Morgan incorrectly identified five lawyers as the directors of failed Provincial Finance.

However, an eagle-eyed Business Herald staffer spotted a public apology from Morgan to the lawyers tucked away in the public notices section of this very publication a couple of days ago.

Mindful that the relatively obscure positioning of the advertisement means it might not have reached as big an audience as it could have, Stock Takes is only too pleased to help out by giving the apology a little more prominence.

"The author and publishers of After the Panic hereby unreservedly apologise to Messrs Ray, Wadsworth, Cann, Gay and Mansfield for the embarrassment and distress caused by the error."

A corrected version of the book is now on sale.

CAMERON'S COMEBACK

News that Kathmandu founder Jan Cameron intends to set up a sizeable new outdoor clothing business to rival the one she sold to Goldman Sachs and Quadrant Capital introduces an extra frisson of intrigue into the private-equity firm players' attempts to float the business.

Cameron said last week that she had well advanced plans to set up an outdoor clothing business of 60 stores, 30 in New Zealand and 30 in Australia, to compete with Kathmandu next year.

You'd expect she's got more than enough cash to fund the plan, having got something close to $300 million for Kathmandu when she sold out four years ago.

It's been reported Cameron bought discount variety chain Australian Discount Retail, formerly owned by The Warehouse, this year which would provide the retail footprint for her plans in Australia.

It's worth noting, too, that Cameron has this year increased her stake in listed NZ retail group Postie Plus to 17.5 per cent. Are we getting ahead of ourselves to wonder whether Postie Plus and its chain of 75 stores forms part of Cameron's plans?

Meanwhile, Kathmandu's management has pointed to a restraint of trade agreement they say applies to Cameron until 2011 which prevents her from even mentioning plans to start a competing brand. Cameron doesn't appear fazed.

Her announcement's timing - in the midst of the the Kathmandu IPO process - is surely no accident. You have to wonder what she's up to. One suggestion is she's behaving honourably towards Kathmandu's prospective IPO investors by ensuring they are fully informed of the risk to the company's envious margins her new business represents.

AMATEUR HOUR

An aspect of the Kathmandu IPO Stock Takes doesn't like is that the retail offer takes place first. Before the float observers suggested retail investors should take their cue from the professionals - that is, the institutions - as they decide how good an opportunity the float is and how much they want to pay. But they've been denied that.

The retail offer opened this week and closes next week, during which time broking firms will be looking to get retail clients to commit to buying stock without knowing whether professional investors see it as a good investment opportunity or not.

Furthermore, investors won't know how much they will pay for stock until the institutional bookbuild is completed on November 12. The indicative price range is $2.01 to $2.32 per share but the final price, according to the prospectus small print, "may be within, above or below this range".

Meanwhile, sources close to the vendors continue to run the line New Zealand investors are being overly cautious about the offer, the business and its prospects, in contrast to Australian investors who are embracing it much more readily.

They also question the focus here on whether Goldman Sachs and Quadrant keep some ownership or not and say Australian investors prefer to see private-equity owners exit completely in such situations.

Stock Takes suspects Cameron's moves may help ensure Goldman Sachs and Quadrant retain some "skin in the game".

THE MORNING AFTER

Questions are being asked about New York-listed Chinese firm Agria after its buying of a cornerstone stake in PGG Wrightson was revealed a couple of weeks back. On the face of it, a tie-up between PGG Wrightson and Agria looks good, but as it has been pointed out, the company clearly has some issues

One wag suggests PGG Wrightson's situation is a little like that of the person who wakes up in the morning to find the gorgeous creature they hooked up with the night before when the lights were low and the drinks were flowing looks somewhat less alluring in the cold light of day.

We're not saying this is the case with PGG Wrightson but in many aspects of life, including business, a perfunctory performance of due diligence is only going to increase the risk of ugly surprises later.

THEY'RE BACK!

Vestar's Kelvin Syms and Simon Purvis - currently facing legal action alleging negligence, breach of fiduciary duty and breach of the Fair Trading Act in relation to their roles as directors of the failed financial advisory group - are back.

The pair are listed as directors and shareholders of a company called KSS Group Ltd which was registered last month.

As we've pointed out before, Vestar's investment committee, on which both Syms and Purvis served, demonstrated an uncanny ability to select doomed finance companies on behalf of its clients.

Meanwhile, also owning shares in the new company is David Stock, a prominent Christchurch lawyer who was a director and shareholder of failed finance company Mascot. Stock attracted headlines a couple of years ago when he was censured and fined by the Canterbury District Law Society for acting for both his long-term mistress and her husband in relation to a transaction that saw the husband sign away his interest in the family home. The husband said he was unaware of both the ramifications of the transaction and that Stock - "a close family friend" - had been having sex with his wife for several years.

Syms yesterday assured Stock Takes KSS Group was not a financial advisory business but a "tax-efficient passive investment vehicle" for its shareholders.

STILL A HILL TO CLIMB

Jeweller Michael Hill International's share price has been under a bit of pressure for the past month or so and was already headed south when the company reported a 0.4 per cent fall in first-quarter total same store sales a week or two back.

Wellington brokers McDouall Stuart noted the Australasian performance was resilient but the story was less positive out of North America where confidence is low.

The brokers reckon the next, or second-quarter, which includes the Christmas period, has historically provided more than a third of the company's revenue and will be an important one for Michael Hill.

"With robust future growth opportunities in the US and Canada, we retain our buy recommendation." Michael Hill shares were steady at 65c yesterday.