Watson raises Bendon stakes

By SIMON HENDERY

Pacific Retail Group has hooked a further 3.5 per cent of Bendon Group, taking the Eric Watson-controlled company's interest to a level that could bust two competing bids for the lingerie manufacturer.

PRG said yesterday that it had secured an option to buy almost 1.1 million Bendon shares (3.55 per cent of the company) from financial services giant Axa at $1.90 a share or just under $2.1 million in total.

This followed Wednesday's announcement by PRG, which is 73 per cent owned by Mr Watson's Logan Corp, that it had spent $9.7 million ($2 a share) to acquire 15.5 per cent of Bendon from Tower Asset Management.

PRG's total stake in Bendon is now effectively 19.05 per cent - probably enough to sway a looming shareholder vote on a sale of the group's operating subsidiary to either a consortium lead by Bendon managing director Hugo Venter or a second mystery bidder which emerged this week.

That bidder is thought to be an Australian rival which showed interest in Bendon last year.

The $38.5 million bid by Mr Venter's consortium is supported by Bendon's 26 per cent shareholder AMP Henderson.

Under the Companies Act, because the sale of the operating subsidiary involves more than half Bendon's assets, the bid would require 75 per cent shareholder support.

Given that not all shareholders are likely to bother voting, PRG's 19 per cent stake is likely to be pivotal.

PRG's stake is also a snip below the 20 per cent trigger point which, under the Takeovers Code, forces an incoming shareholder to make an equal offer to all shareholders in a company.

Phil Newland, a PRG director and group managing director of Logan's parent company, Cullen Investments, said yesterday that PRG's additional 3.5 per cent stake in Bendon "brings us to a threshold we are comfortable with for the present".

The option to buy Axa's shares, which is not subject to a price escalation clause, expires on January 31.

Bendon shares were unchanged at $1.92 yesterday.

PRG was also unchanged at $2.10.