This article is from the Australian Property Journal archive
DEPARTMENT store Myer has made a major proposal to acquire billionaire Solomon Lew’s Premier Investment’s apparel brands which includes Just Jeans, Jay Jays, Portmans, Jacqui E and Dotti.
The proposal outlines an all-scrip merger, that would see Myer buy Premier’s Apparel Brands business in exchange for the issue of new shares in Myer.
The Apparel Brands business would be contributed together with sufficient cash to ensure a consistent capital structure for each of the businesses and to provide Myer with capital to invest in further growth initiatives.
The proposal would see Premier distribute all of its shares in Myer to Premier shareholders, meaning Premier cease to own shares in Myer.
Premier currently owns around 31% of Myer and would own a little under 30% of Myer if the transaction proceeds.
“While we have one of Australia’s strongest retail brands, store networks and loyalty programs, there is a significant opportunity to reinvest in our product offering and customer engagement capabilities and further optimise our supply chain to achieve our full potential,” said Olivia Wirth executive chair at Myer.
“It quickly became clear from our review that the combination of Myer and Apparel Brands could offer significant potential synergies and prospects for growth and warrants further examination.”
Apparel Brands has a retail network of 717 stores across Australia and New Zealand, generating revenues of $845 million in FY23.
Myer has also proposed Century Plaza Investments would be represented on the board of Myer if the deal goes ahead.
With Century Plaza advising Premier that it will propose that Solomon Lew, chairman of Premier, join the board of Myer as a non-executive director.
The transaction would need to be approved by Myer’s board and shareholders, Premier’s Board and shareholders and would also be subject to ASX, ACCC and ATO engagement.
“The board’s focus in relation to the proposed transaction will be assessing the potential benefits for Premier shareholders, whilst maintaining the integrity and growth initiatives of its Apparel Brands business,” read a statement from Premier.
“Accordingly, Premier and Myer have agreed to conduct reciprocal due diligence and discuss potential transaction terms.”
Myer is working with Barrenjoey and Premier is working with UBS.
After strong trading conditions across the FY23 period, Myer still closed out the year with total sales up 12.5% to $3,362.9 million with sales in the second half seeing just 0.4% growth.
