Myer insiders to survive AGM

BILLIONAIRE Solomon Lew is at war with Myer and even more particularly with its chairman Garry Hounsell.

Whether it takes one year or 10 the war will only end when Lew storms or is invited into the Myer boardroom and, either way, Hounsell passes him on the way out. If, of course, he hasn’t already left.

The only alternative end to the war is if “something” happens to Myer at the corporate level. It gets taken over or merges (as I think it must, ultimately, with David Jones or perhaps Target). Or Myer is otherwise “terminated”.

Absent those outcomes Lew is not going to go away.

Anyone who doubts that, should remind themselves of how Lew sat as a very pesky minority shareholder on the register of the listed Country Road for 17 years. Controlling shareholder, the South African Woolworths (no relation), only got rid of Lew by paying him a hefty price for his shares – something depend on his assessment of the percentage of votes he can get on his side. If he can, he will clearly want to demonstrate significant shareholder opposition to the board. The easiest way is to garner a 25 per cent-plus vote against the company’s remuneration report.

Last year he got sufficient support to rack up 29 per cent votes against “everything” . The 29 per cent vote against the RemReport topped the 25.1 per cent required for a “first strike”. Lew will be aiming to get sufficient support to “win” a “second strike”.

If he does that forces a further vote on whether the whole board should be spoiled. But to carry that vote requires the normal 50.1 per cent majority. This is why isn’t going to get there.

The one scenario that could derail all this is either a pre-meeting “profit warning” or a plunge in the share price back below 40c.

A warning and a drop to, say 30c, and it would be all over Red Rover.