EYE­ING MYER

Financial Mail - - COVER STORY / WOOLWORTHS - Zeenat Moorad mooradz@bdfm.co.za

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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