Poon snares Harvey Nichols

DICKSON POON, the flamboyant Hong Kong entrepreneur, is confident that shareholders will accept his controversial offer to buy Harvey Nichols and the non-Asian assets of his company Dickson Concepts.

On Friday, after a week's delay, the offer document was sent to shareholders. He told The Independent on Sunday he had been talking to institutional shareholders and found "their feedback has been positive".

However, the offer has been widely criticised by analysts, who accuse Mr Poon of moving the profitable parts of his public company into a privately owned British Virgin Islands registered company, Broad Gain Investments, and paying minority shareholders less than the assets would be worth on the open market.

Mr Poon said: "I genuinely believe that the proposed transactions are in the best interests of the shareholders."

He maintains that his private company "can afford to take a much more long-term view" than some shareholders might be prepared to accept. He is, for example, planning two new Harvey Nichols stores. Money is also required to rescue the ailing Paris-listed ST Dupont business and to develop a luxury bag retailer based on a franchise from the American designer Tommy Hilfiger.

Dickson Concepts, originally a profitable chain of designer fashion shops in Asia, is now in the red although Harvey Nichols is making good money.

Mr Poon is offering HK$1,486m (pounds 119m) for all the non-Asian assets, but because of the way the offer is structured, he - as the main shareholder in Dickson with 51.9 per cent - will receive HK$900m from a special dividend payment, leaving him having to raise HK$600m to buy a group of companies with considerable earnings potential.

Critics say that if Harvey Nichols were sold to a third party, it would attract a far better price than Mr Poon is offering the minority shareholders. But he insists that in making the special dividend payment he is paying a 10 per cent premium over Harvey Nichols's asset value.

According to an analyst in Hong Kong, this makes it a good deal for short-term shareholders who will realise a decent profit on their investment. Longer-term shareholders, who have weathered sharp falls in the Dickson share price, have little to cheer about.

Institutional investment in Dickson is limited. The largest of the institutional shareholders, the US-based Capital Research Management, holds around 2 per cent of the equity.

One fund manager with an interest in Dickson said: "We don't particularly like the deal, but there's not enough muscle to reject it. We're planning to take the money and get out."

Mr Poon has paved the exit route with a promise to increase his holding in Dickson Concepts by 50 per cent, albeit at the less-than-generous price of HK$2 per share, or 60 per cent less than the net asset value per share after the special dividend has been paid.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
News
ebooksNow available in paperback
News
The 67P/CG comet as seen from the Philae lander
scienceThe most important scientific breakthroughs of 2014
Arts and Entertainment
Ian McKellen as Gandalf in The Hobbit: The Battle Of The Five Armies
film
Sport
football
Arts and Entertainment
Sarah Koenig, creator of popular podcast Serial, which is to be broadcast by the BBC
tvReview: The secret to the programme's success is that it allows its audience to play detective
News
Ruby Wax has previously written about her mental health problems in her book Sane New World
people
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Marketing Services Manager - (communications, testing, DM)

£32000 - £35000 per annum + benefits: Ashdown Group: Marketing Services Manage...

Guru Careers: Finance Account Manager

£Neg. (DOE) + Excellent Benefits: Guru Careers: A Finance Account Manager with...

Ashdown Group: Java Developer - Hertfordshire - £47,000 + bonus + benefits

£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

Ashdown Group: Direct Marketing Manager - B2C, Financial Services - Slough

£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas
La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

Deaf community outraged by La Famille Bélier

The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie