Watson merges Bendon with Australian company

UPDATED: Hanover Finance co-founder Eric Watson will maintain a shareholding in lingerie maker Bendon through Cullen Investments following a merger with Australia’s Pleasure State business.

In a statement just released, Bendon confirmed the deal and said the merger will increase the company's global sales platform with a wider range of brands.

The merged entity will be led by Bendon chief executive Justin Davis-Rice, with former Myer executive chairman, Bill Wavish, appointed as non-executive chairman.

“Bendon is an iconic New Zealand company with a proud heritage which has firmly established itself in Australia. I look forward to being part of the next phase of growth,” Mr Wavish said.

In 2003 Mr Watson’s Cullen Investments paid $58.7 million for Bendon, whose underwear labels include Elle Macpherson Intimates and Stella McCartney lingerie.

Mr Watson said the merger and having Mr Wavish join the board were very positive steps for Bendon.

“Bill’s extensive corporate and retail experience will be invaluable in the next phase of Bendon’s growth,” he said.

Cullen Investments will maintain a significant beneficial interest in Bendon, he said, without giving details.

Mr Davis-Rice signaled an aggressive growth strategy for the global lingerie company. 

“Bendon’s size and scale makes the company a dominant force in the Australasian intimate apparel industry.

Mr Watson was valued at $220 million in the most recent NBR Rich List.

His other domestic assets include a half-share in Viaduct nightspot Soul and 75% of the New Zealand Warriors NRL franchise.

Unlike fellow Hanover co-founder, Mark Hotchin, Mr Watson has escaped much of the fallout from the collapse of the finance company.

Hanover entered a moratorium owing $554 million in 2008. Mr Hotchin and co-founder Eric Watson took $91 million in dividends in the years before the company defaulted on payments to investors, but argue that most of the cash went back into the company to repay related party debt.

Hanover investors subsequently voted to merge with Allied Farmers, a deal that has since soured with allegations of inflated loan values and referrals to the Serious Fraud Office.

The Financial Markets authority is investigating Hanover and has frozen some assets of trusts associated with Mr Hotchin.