Australia's Myer to buy rival Premier's apparel business in $569 mln deal (updated)

Myer Holdings

28/10/2024 23:36

(Adds deal details from paragraph 5 onwards)
    By Scott Murdoch and Rishav Chatterjee
       SYDNEY, Oct 29 (Reuters) - Australian department store
owner Myer  MYR.AX  will buy retail billionaire Solomon Lew's
Premier Investments'  PMV.AX  apparel brands business, in a deal
valued at A$863.8 million ($568.38 million), the companies said
on Tuesday.
        Myer will issue Premier 890.5 million new shares in the
retailer and there will be an A$82 million cash contribution by
Premier to Myer as part of the transaction. 
        Lew's Century Plaza Investments will emerge as the top
shareholder in Myer, with a 26.8% stake, and Lew will join the
board.
    Myer will acquire Premier's Just Jeans, Jay Jays, Portmans,
Jacqui E and Dotti brands.   
    The 890.5 million shares to be issued to Premier represent
51.5% of Myer's enlarged share base.
        The deal is the latest step in a long-running battle
between Lew and Myer that began when Premier started buying the
department store's shares in 2017. Lew has been a fierce critic
of Myer and its previous board and management team, who he
blamed for the retail chain's underperformance. 
    Lew was previously the chairman of Coles Myer almost three
decades ago when the department store chain and grocery giant
Coles Group  COL.AX  were a merged entity. 
        As part of the deal, Premier will distribute all of the
new Myer shares received to its eligible shareholders on a
pro-rata basis. Each Premier shareholder will receive about 7.2
Myer shares per Premier share, the company said.
    Premier shares rose 13% in early trading on Tuesday, while
Myer shares were up 3.3%.
    "This is an opportunity for our team and our shareholders to
play an important role in the future of the Australian and New
Zealand retail landscape," Lew said in a statement.
        Premier has been working to unlock higher value for its
shareholders with a potential split of the firm into four
Australian-listed entities. 
    Myer has faced difficult trading amid a pullback in retail
and discretionary spending in Australia, with sales falling 2.9%
to A$3.3 billion in the year to July 27 and profit plunging 26%.
    Its chair, Olivia Wirth, will continue to be the firm's boss
after the deal. 
    Myer said in June it had approached Premier to combine their
apparel brands. 
($1 = 1.5188 Australian dollars)

 (Reporting by Scott Murdoch in Sydney and Rishav Chatterjee in
Bengaluru; Editing by Alan Barona and Jamie Freed)
 ((Rishav.Chatterjee@thomsonreuters.com))