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Denise Tsang

Conglomerate Wheelock has been forced to raise its offer price for Lane Crawford International by 5.9 per cent following opposition to the original offer by minority shareholders.

 The company has lifted the offer price for the retailer to $12.50 per A share from $11.80 and to $1.25 per B share from $1.18.

 Wheelock's statement yesterday did not mention the reason for the sudden increase, but warned that this was a final offer.

 Wheelock directly and indirectly owns 74.72 per cent of Lane Crawford's A shares and 74.95 per cent of the B shares.

 Last week, the company ran into objections from minority shareholders who control more than 10 per cent of B shares.

 They threatened to vote against the proposal and demanded a higher offer.

  They said that Wheelock's offer represented an unacceptable discount to the retailers net asset value (NAV).

 David Webb, who represents the group of minority investors, yesterday said: 'Without our intervention, the offer is unlikely to have been increased.'  Mr Webb said the group would release a statement on its intention by this evening and that he was in the process of consulting with the investors.

 Wheelock said it was forbidden under listing rules to again increase the offer price.

 The adjustment in prices means an addition of $22 million to the price tag on Lane Crawford.

 The dispute focuses on Lane Crawford's NAV.

 The original offer price represents a discount of 28 per cent to the company's unaudited adjusted NAV.

 Mr Webb said the revised offer price still failed to attribute any value to the retail business, primarily department stores operated under the 149-year-old brand name Lane Crawford.

 He pointed out the company's securities portfolio and investment properties alone valued Lane Crawford at $12.53 per A share, taking into account valuations since March 31.

 The portfolio comprising Hong Kong listed securities, carried a market value of $500.9 million on June 4.

 The company's prime investment property - Lane Crawford House in Central - and other investment properties were valued at $916.2 million on May 31.

 The retail business suffered an operating loss for the fifth consecutive year for the year to March 31, with the loss doubled to $92.3 million from $46.2 million previously.

 The loss dragged Lane Crawford into an attributable loss of $66.6 million during the March-end period from a $1.4 million attributable profit.

  The minority shareholders expressed doubts about the company's claim that the group had been hit by the poor performance of its retailing operations.

 The shareholders said the company had poured 'as much doom and gloom as possible' into last year's profit and loss account to boost the chances of a successful takeover.



Wheelock lifts Lane Crawford bid on hostility