David Jones agrees to review merger with Myer Holdings
18 Mar 2014
David Jones Ltd, Australia's second-biggest department store chain, today said it will look into the A$3.4 billion ($3.09 billion) merger offer from Myer Holdings Ltd, less than two months after having rejected the proposal.
Sydney-based David Jones said it had hired management consultant Port Jackson Partners Ltd as its strategic adviser.
''Port Jackson Partners will assist the company in undertaking a review and assessment of the value of synergies that can be extracted if David Jones and Myer were to merge,'' it said in a filing to the regulators.
''In addition an assessment of the value that can be derived for shareholders if David Jones continues with the implementation of its Future Strategic Direction Plan on a stand alone basis will be undertaken,'' the statement added.
Myer Holdings, Australia's largest department store chain, had on 28 October 2013 tabled an all-stock merger, but the board of David Jones rejected the proposal in late January 2014 by saying that the proposal "did not represent sufficient value for David Jones shareholders."
Under the terms of Myer Holdings proposed merger, David Jones would have been acquired in exchange for Myer shares at a "zero premium exchange ratio" of 1.06 Myer shares for each David Jones share, based on the respective 12-month volume weighted average prices at that time. The offer also included due diligence.
"The execution of any such a transaction would have substantial commercial, market, business and regulatory risks including the Australian Consumer and Competition Commission review process," David Jones had then said.
Founded in 1838 by Welsh immigrant David Jones, the up-market chain is one of the oldest continuously operating department stores in the world.
It has 38 department stores and rack stores in most Australian states and territories located in major retail precincts and shopping malls.. The company also has a financial services alliance with American Express Australia.
Its iconic Melbourne flagship store was renovated in mid-2010 at a cost of $250 million.
It has a market cap of A$1.8 billion and revenues of A$1.8 billion in 2013.
Based in Docklands, Myer Holdings operates 67 department stores offering various products, including women's men's youth and children's wear, intimate apparel, beauty, fragrance, and cosmetics, home wares, electrical goods, and many others.
It has a market cap of A$1.6 billion and posted revenues of A$2.6 billion.
