“Union” no more: as Woolworths pulls the rug from under Myer merger offer to DJ’s, the department store pulls the proposal
In a statement to ASX, Myer acknowledges the $2.15 billion cash takeover bid by Woolworths for David Jones, announced today.
Myer will today withdrawal the proposed merger of equals, which valued DJ’s shares much lower than the $4 a-piece South African-based Woolworths are willing to pay, or 25% above its current share price.
The department store headed by Bernie Brookes tabled a merger offer to David Jones several months ago, but was rebuked as the latter was not happy with the deal.
“While we believe in the strategic merits of our proposal and the potential value accretion for both sets of shareholders, we have always maintained a disciplined approach to valuation,” the company said in a statement to ASX.
Myer CEO Bernie Brookes said the retailer will continue to be a “robust competitor” in the Australian retail landscape.
Myer shares soared almost 5% today (4.78%%) to $2.41, following the news.
“Myer remains fully committed to continuing to progress our well-established five-point plan with a number of new initiatives to drive sales and profitability while continuing to invest in the growth areas of the business.”
“As we move into FY2015 we expect to benefit from a number of strategic initiatives including new stores, major refurbishments, growth in exclusive brands and the online business.
“Myer remains Australia’s largest full-line department store business” he added.
The retailer believed $85 million of cost synergies that could be achieved from the merger, although DJ’s had disputed this figure.
Company bosses had envisioned ‘creating a sustainable more competitive retailer and delivering significant value for shareholders of both companies,’ from the merger of the two high street stalwarts.
DJs shareholders will vote on the Woolworths acquisition proposal in June.