Threat to delist helps Poon bag Harvey Nicks

By Nigel Cope,City Editor
Friday 06 December 2002 01:00
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The Hong Kong entrepreneur Dickson Poon clinched victory in his £137.5m takeover bid for Harvey Nichols yesterday when a key dissenting shareholder decided to accept the offer.

However, one leading fund manager said Mr Poon had "repurchased a quality asset at a discount price" after threatening to delist the upmarket department store retailer if the offer was rejected.

Mr Poon already holds 50.1 per cent of Harvey Nichols and had bid 250p a share for the remainder. Mr Poon needed the support of 90 per cent of the total equity in order to purchase the remainder compulsorily.

He fell short of that yesterday, securing 53.49 per cent of the minority and 76.79 per cent of the total, with Deutsche Asset Management voting its crucial 14.9 per cent stake against the bid.

But Mr Poon's threats to delist Harvey Nichols forced Deutsche and other dissenting investors to change their minds and accept the cash.

"We don't believe it's in the interests of our clients to be minority investors in an unquoted company and therefore will be accepting the offer," a spokeswoman for Deutsche said. The group has now dropped a threat to take legal action against the company's independent directors. Harvey Nichols shares closed 6p higher at 247.5p on news that the bid was likely to succeed.

Henderson Global Investors, which holds 1 per cent of the shares also decided to accept. Colin Hughes, at Henderson, said: "We still hold the view that the offer is below what we think it is worth. We will have to conclude reluctantly that we will have to accept. But he [Mr Poon] has repurchased a quality asset at a discount price."

Asked to comment on the independent directors, Mr Hughes said: "I think they were in an awkward position but they could have done better."

Shareholders contacted the Financial Services Authority but discovered Mr Poon was within his rights. He could not have used the same tactics in Hong Kong, where bidders can only delist a company with the backing of 90 per cent of the minority shareholders.

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