Briscoe Group will defend a claim by outdoor equipment chain Kathmandu Holdings for $3.2 million in costs incurred during last year's failed takeover bid.

Auckland-based Briscoe, which is Kathmandu's biggest shareholder, has already paid $637,711.65 to reimburse some of Kathmandu's costs, but says the balance doesn't meet the criteria set out in the Takeovers Code.

"The disputed amount consisted of fees charged by global investment advisers Goldman Sachs and consulting firm Bain & Co," Briscoe said in a statement.

"The fees were unreasonable in both nature and quantum, and Kathmandu had not established they were for work that was necessary to ensure its shareholders were properly informed about Briscoes' offer."


The Takeovers Code allows for a target company to recover as a due debt "any expenses properly incurred by the target company in relation to an offer or a takeover notice", while directors of a target company are entitled to have any properly incurred expenses refunded by the target company.

Briscoe built up a near-20 per cent stake in Kathmandu ahead of its theoretical cash-and-scrip bid at $1.80 a share made in the middle of last year, offering 20 cents cash and five of its own shares for every nine Kathmandu shares.

That was rejected by Kathmandu's board as undervaluing the company.

Briscoe has hired David Goddard QC to lead its defence, supported by Belly Gully senior partner David Cooper.

Kathmandu shares rose 0.6 per cent to $1.65, while Briscoe shares were unchanged at $3.25.