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Denise Tsang

Dickson Concepts (International) chairman Dickson Poon has offered to pay at least $1.52 billion for the group's non-Asian assets in a complicated restructuring that will tighten his grip on the retailing empire.

 Mr Poon proposes to buy the group's majority stakes in London-listed Harvey Nichols and Paris-listed luxury accessories maker ST Dupont, real estate in London's Knightsbridge and the group's leather-making arm in the United States.

 The offer, which was subject to approval by independent shareholders, would leave Dickson Concepts as a pure Asian retail play.

 On completion, the company would pay a special cash dividend of $6.80 a share to shareholders.

 As the majority shareholder, Mr Poon would receive a payout of about $950 million. He conceded that, as a result, he would pay only about $600 million out of his own pocket for the restructuring.

 Mr Poon also offered to buy a further 51 million shares in the company at $2 a share following the dividend payout, raising his holding from 51.9 per cent to a maximum 75 per cent.

 The partial offer was subject to Securities and Futures Commission approval.

 Shareholders thus would have the opportunity to cash out at a premium of $2.60, or 41.93 per cent, to the company's last quoted share price of $6.20 before the long holiday weekend.

 Dickson Concepts shares have fallen 62 per cent since November 1997.

 Justifying the restructuring, Mr Poon said it would release Dickson from the heavy burden of funding the non-Asian businesses.

  The company's depressed share price failed to reflect the value of the Asian assets and there was a risk it would continue to under-perform if a recovery in Asian economies coincided with a European downturn.

 The restructuring would see Mr Poon shoulder the future investment commitment of at least $500 million for the non-Asian businesses during the next three years and their debt liabilities.

 'Whether I control the group and the non-Asian assets directly or indirectly doesn't matter. I remain the ultimate owner,' Mr Poon said.

 Analysts generally believed the restructuring marked the first step in a string of similar exercises.

 Some speculated Mr Poon would off-load the interest in Harvey Nichols and the Knightsbridge property it occupied, while some believed a possible privatisation of Dickson was looming.

 They concluded Mr Poon would be well positioned for any turnaround in Asian retail markets as he had conducted his own acquisitions during the lowest ebb in the region's economic cycle.

 Mr Poon would not say if he would off-load the non-Asian assets eventually, but said he had yet to receive any 'committed offer' for the prime Knightsbridge property.

 'What I can say is holding investments on a long-term basis has been my strategy.'  The most valuable of the non-Asian assets was Dickson's 50.1 per cent of Harvey Nichols, which operated upmarket department stores and restaurants in Britain. The majority stake was valued at $607.2 million.

 The Knightsbridge property, leased to Harvey Nichols, carried a market value of about GBP48.7 million (about $602.55 million).

 The total consideration for the non-Asian assets was $1.52 billion to $1.58 billion, dependent on convertible bond subscription and underwriting obligations relating to ST Dupont.

 Dickson described the disposal price as 'fair value'. It compared with a net asset value of $690.6 million on September 30 last year.

 Analysts said the asset value could have gone up during the past six months as Britain's property market was booming.

 Minority shareholders can choose to accept the special dividend and the partial offer for Dickson shares or take up the dividend pay-out and keep their shares.

 Mr Poon painted a rosy picture of Dickson's prospects in spite of the asset transfer.

 Dickson's remaining business would include 86.8 per cent-owned department store operator Seibu and the distribution rights for apparel and bags under labels such as Polo Ralph Lauren, Brooks Brothers, Coach and Escada.

 Dickson expected to post its first loss in its 19-year history for the year to March 31.



Dickson Poon in $1.5b bid to tighten grip on empire