Myer Fresh Plea For David Jones Hand

Written by Oonagh Reidy     21/02/2014 | 12:54 | Category: HOME OFFICE

Broader implications of DJ's and Myer union unclear, including DJ's deal with Dick Smith

Myer Fresh Plea For David Jones Hand

Myer still wants to hook up with David Jones, despite an earlier rebuff by the higher end retailer.

In a new letter to the rival retailer, dated 20th February, Myer reiterated its interest in a merger between the two companies.
 
David Jones has confirmed it received a letter from Myer Chairman Paul McClintock reiterating its interest in a merger, which would change the retail landscape irrevocably, if approved by ACCC and shareholders.

The deal could be worth $3 billion, reports suggest. 

David Jones board says it "will consider any proposal which is on terms that are in David Jones shareholders' best interests," meaning a merger could now be on the cards after the initial refusal last year. 

The board "will respond to Myer in due course," it confirmed in a statement to ASX, yesterday.

The implications for Dick Smith, who has a five year Retail Brand Management Agreement with David Jones are unclear. 

Both high street department stores have struggled to make traction in hugely competitive electronics. Dick Smith who this week announced strong first half 2014 profits, sales attributed, in part, to its presence within David Jones, was not available for comment at the time of writing.  

In the letter addressed to DJ's Chairman Peter Mason, McClintock expressed his belief the merger is "highly compelling, creating a sustainable more competitive retailer and delivering significant value for shareholders of both companies."
  
He also cited $85m of cost synergies that could be achieved, but sought to address concerns on whether the proposal of a stock nil premium is fair to shareholders. 

"We are open to discussing the transition structure including the basis on which your property portfolio could be separated out from the department store business," he wrote.

Myer also confirmed Bernie Brookes will stay on as CEO, and will continue in his role beyond his original contract due to end in August 2014, and is now on an 'open term 'contract. 

Brookes confirmed his commitment to becoming a potential CEO for the "merged entity".

McClintock said: "While we have made clear the selection of the CEO for any future merged entity would be a shared decision by both companies, Bernie's reappointment provides us with at least one option for that role."


Breaking News

  • Samsung In The Dog House Over Ad Scam

    Samsung In The Dog House Over Ad Scam
    'Pop', 'The dog and the cat' and 'Boom': Samsung is suddenly involved in a controversy over what has been labelled "dodgy" creative awards at the recent Cannes Press Lions Awards.

  • Harman Kardon Sharpens Its Sound Bars

    Harman Kardon Sharpens Its Sound Bars
    When it comes to vibrant, natural sound quality you can count on Harman Kardon and Bowers & Wilkins to scale mountains and cross oceans to deliver.

  • Apple Slips As Android Gains In Australia

    Apple Slips As Android Gains In Australia
    Android Smartphone marketshare in June 2014 has grown to 68pc in Australia as Apple falls 1.9pc, with a small loss for Windows Phone and a tiny gain for BlackBerry compared to June 2013.