It’s thought that Woolworths, which already owns David Jones, aims to also take over Myer, Australia’s largest department store chain. Is this why the wily Solomon Lew has upped his stake in it?
One late afternoon in March, an A$100m raid was carried out on the shares of Myer, one of Australia’s two high-end department store chains. Days later, retail tycoon Solomon Lew emerged as owner of 10.8% of the company through his listed vehicle Premier Investments. The Myer trade was executed by Pershing and Blue Ocean Equities, brokers used by Lew in an earlier share sweep. Financial high jinks is his thing. In the final throes of Woolworths’ R23.3bn buyout of David Jones (DJS) in 2014, Lew, Australia’s 15th-richest man, amassed a blocking stake in DJS. It served as a thinly veiled threat, forcing Woolworths to buy the remainder of clothing group Country Road at a fat premium.
The gamble would go on to end his storied tenure as a minority shareholder in Country Road spanning nearly 17 years, the hallmark of which was outbursts so grating as to make activist investors Nelson Peltz and Carl Icahn look like kittens.
With their southern hemisphere retail play held to ransom, Woolworths eventually coughed up the extra R2bn to bag DJS.
Lew proved to be one of Australia’s shrewdest and most patient investors.
His rounding on Myer shares is doubtless part of a bigger gambit — former sparring partners warn that he is not to be underestimated.
Myer is steeped in a vague iteration of an A$600m turnaround plan in a retail market undergoing structural change. It’s cheap and vulnerable and this makes it prey.
Shares are currently trading at A$0.76 from the A$4.10 they floated at in 2009. Earnings haven’t grown in roughly six years.
UBS, Macquarie and Goldman Sachs have
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