Watson unloads Advantage stake

By PETER GRIFFIN IT writer

Millionaire entrepreneur Eric Watson has bailed out of once glittering technology company Advantage Group, but his tentacles still stretch through the sector.

Watson's Calibre Investments, an offshoot of Cullen Investments, has sold 11.5 million shares, about 94 per cent of his stake in Advantage, to the family trust of Advantage co-founder and board member Nick Gordan. The price was 37c a share.

That is matched by Gordan's sale to Watson of his 3.77 per cent stake in Pacific Retail Group for a similar sum - about $4.2 million.

It boosts Watson's stake in PRG to nearly 77 per cent.

Most commentators put Watson's sale down to a chilling in relations with Advantage chairman Evan Christian.

But Cullen's group managing director, Phil Newland, said it was a matter of focusing on core business. "Advantage at the end of the day was a passive stake, a company that we neither had control of or were on the board of."

Watson bought into Advantage in 1998, gradually increasing his stake at prices ranging from 28c to 60c a share but averaging 35c. Before the dotcom slide Advantage shares topped $5.65, and stayed above $3 for a time after the downturn.

At one stage Watson and Gordan, along with Christian, aimed to bundle Advantage and a handful of other tech companies into holding company Qixel for a Nasdaq listing.

The plans fizzled when the technology bubble burst and the three Advantage shareholders redistributed the capital they had put into Qixel between them.

Watson still has millions of dollars tied up in IT companies, listed and unlisted.

Cullen owns major systems integrator gen-i, which produced an operating surplus of $2.7 million on revenue of $107 million in the year to April 29, when it was known as Wang New Zealand.

Watson also has a stake of around 10 per cent in listed tech investor Strathmore, which has ditched all but one of its struggling investments to concentrate on Global Online, the promotions company responsible for loyalty programme Kachingo!

Strathmore lost $2.63 million in the six months to January 31.

Through Hanover Group, another investment vehicle, Watson owns telecoms equipment supplier Cogent Communications and Ubix Document Solutions.

As well as his tech interests, Watson and his investment companies dabble in everything from bloodstock and property to retailing and finance.