Onesource gets Watson talking

Eric Watson and Mark Hotchin's Hanover Group is planning to float office technology company Onesource on the sharemarket.

Talking in Auckland during a four-day visit to New Zealand, Watson says an initial public offering of shares is "almost certain" and investment banks have pitched to do a scoping study.

He says Onesource has revenue of about $140 million, operating earnings before depreciation and amortisation of close to $20 million, and is not part of Hanover's core business - finance.

That is one part of the news from yesterday's interview. The other part: Eric - estimated worth $275 million, according to the National Business Review Rich List - is talking again.

Cynics say the possible floats of Onesource and of the finance business of Pacific Retail Group - Watson owns 81.4 per cent of Pacific Retail - are the explanation.

They say he needs to polish his public image. They talk of "the Watson factor" - the notion that his name will repel rather than attract investors.

Six years ago, the term had the reverse meaning. It referred to investors piling into companies when Watson took a stake.

But, since then, negative publicity included the Securities and Exchange Commission in the United States saying he "engaged in conduct that had the effect of defrauding a US issuer and its shareholders".

Most coverage of Pacific Retail is focused on the money-gobbling PowerHouse retail chain in the UK, not its successes.

Is it accurate or insulting that some investment bankers say his name will make a float more difficult to sell? "It's not insulting," says Watson, sitting at a boardroom table. "You would have to do a lot better than that to insult me."

None of the investment bankers he has met - "I've met most of them this week" - has said that.

"We haven't done an IPO recently to find that out. Is it a problem? I don't know."

His most extravagant statement in his own defence is: "In terms of the advice we've had on a potential IPO of Onesource, no, that's not seen to be the case."

So, why talk after a silence in these pages since at least September 2002, when a written statement said he was moving permanently to London?

Watson says a public relations adviser, former National Party president Sue Wood, believes talking occasionally will help to fill a void that otherwise begs speculation.

He is "reasonably ambivalent" about this approach but "we might as well have some facts out there ... dispel some of the mystery".

Setting the record straight

* Watson's main investments overseas have been in property in the UK, the United States, and "a little" in Europe. The weighting of his investments is New Zealand, Australia, and then the US and the UK. He has co-invested with Australia's Babcock & Brown in the UK and Europe.

* He is becoming a "more passive" and "more global" investor but, "I think I'll always have a strong interest in investing in New Zealand".

* He will not make any more sports investments until rugby league team the New Zealand Warriors is a "sustainable success".

* Watson denies he is in London as a tax exile. "It's just a great place to live." He plans to spend most of this year travelling in Europe with his son.

* A senior Pacific Retail executive, Bendon's Stefan Preston, was "dead against" the PowerHouse buy in the UK. Watson keeps the faith that PowerHouse can be turned around.

* Despite past attempts to buy out minority shareholders, Watson is "very comfortable" with Pacific Retail as a public company.