The Myer deal's dead and Australia's oldest department store could be set for South African ownership after its board recommended a bid by Woolworths South Africa to acquire all of its shares at $4, valuing the company at $2.15bn.
The move brings an end to talk of a merger with rival Myer.
Woolworths South Africa is not affiliated with Woolworths Australia and also owns a substantial chunk of Country Road.
The company notified the ASX of the proposal this morning. Shareholders will likely vote on the proposal in June, with the deal, if accepted, completed in July.
David Jones chairman, Gordon Cairns, said: “David Jones is an iconic brand with a long and justifiably proud history. This is a compelling proposal which represents a significant premium to not only our intrinsic value but also to broker valuations and to recent share prices. It represents a substantial earnings multiple.”
David Jones managing director and CEO, Paul Zahra, said: “I am pleased that the Woolworths proposal recognises the attractive outlook for David Jones including the benefits that have and will flow from the continued implementation of our Future Strategic Direction Plan. The Woolworths proposal is an endorsement of our Future Strategic Direction Plan and our management team.”
In the absence of a superior proposal and subject to an independent expert concluding that the Scheme is fair and reasonable and in the best interests of David Jones shareholders, the Board of David Jones unanimously recommends that David Jones shareholders vote in favour of the Scheme. Subject to those same qualifications, each director of David Jones intends to vote all the David Jones shares held or controlled by them in favour of the Scheme.
Cairns said, “In reaching our conclusion that the Proposal is in the best interests of shareholders, customers and employees, the Board has considered a number of alternatives, including standalone value creation opportunities; realising the value of the freehold properties owned by David Jones; or pursuing a merger with Myer in accordance with its proposed terms. Upon assessing the alternatives before it, the Board has unanimously concluded that the Woolworths offer is a compelling option which realises value for our shareholders.”
See the ASX announcement here.
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.
Have something to say? Send us your comments using the form below or contact the writer at adnews@yaffa.com.au
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.