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PRG Takeover Offer: Independent Adviser's Report

Auckland, 19th October 2001

Pacific Retail Group Limited (PRG) - Takeover Offer by Logan Corporation - Independent Adviser's Report

The Committee of Independent Directors has now received, in final form, the report of Andersen (formerly Arthur Andersen) on the merits of the takeover offer made by Logan Corporation for Pacific Retail Group.

Andersen values the shares in Pacific Retail Group in the range of $2.13 to $2.95. The mid-point of this range is $2.54 which Andersen has stated is the value which is the focus of its report. Andersen notes that the mid-point range of $2.54 is "substantially in excess of the offer price of $1.76". The values which Andersen has ascribed to the various tranches of options are also substantially greater than the offer prices. In determining these values, Andersen has factored in a discount of 30% to take account of the illiquidity of shares in Pacific Retail Group and the "minority" nature of the shares.

Andersen has concluded that neither the offer for the shares nor the options is fair but notes the offers do provide an exit mechanism for existing security holders at a price which is 21% above the pre-bid share price.

The Committee of Independent Directors anticipate sending the full text of this Report to shareholders and optionholders, together with the target company statement, next Wednesday. The target company statement will include any recommendation that the Committee of Directors believes it is appropriate to make.

The Committee reiterates its previous advice that shareholders and optionholders should wait to receive this information before making a decision as to whether to accept Logan Corporation's offer. In particular, the Committee recommends that shareholders and optionholders should consider the full text of Andersen's report.

Richard Reilly Chairman, Committee of Independent Directors

The End


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