SYDNEY — Australia's Federal Court has cleared Woolworths Holdings Ltd's $2 billion takeover of department store chain David Jones.
Justice Kathleen Farrell announced her decision Thursday. The Australian Securities and Investments Commission had raised concerns about the propriety of a separate offer Woolworths had made to David Jones shareholder Solomon Lew involving Lew's stake in retailer and Woolworth's subsidiary Country Road Group.
On Monday, 96.8 percent of David Jones shareholders voted in favor of the Woolworths deal at a special meeting in Sydney, ending weeks of speculation that Lew might block the deal. Lew, who owns a 9.89 percent stake in David Jones, abstained from Monday's vote.
The deal will create one of the southern hemisphere's largest retailers with a pro-forma combined fiscal 2013 revenue of over 5.7 billion Australian dollars or $5.3 billion, from 1151 stores across 16 countries, with approximately 43 percent of sales generated in Australasia according to Woolworths.
Established in Sydney in 1838 by Welsh immigrant David Jones, David Jones is the world's oldest continuously operating department store. It operates 38 stores across Australia and is the country's second largest department store by sales, generating 1.85 billion Australian dollars in fiscal 2013 or $1.92 billion at average exchange rates.
At the time of the takeover announcement on April 9, Woolworths said it intended to "review alternatives" with respect to David Jones' property portfolio, which includes two properties in Sydney and two in Melbourne. It has been estimated that the portfolio could be worth 650 million Australian dollars to 1 billion Australian dollars ($608 million to $935 million) if the four central business district properties were redeveloped or air rights were exploited.
Woolworths has been operating in Australia for the past 15 years through Country Road Group, which operates the Country Road, Trenery, Witchery and Mimco brands.
Woolworths has forecast the David Jones deal will extract 130 million Australian dollars or $122 million of synergies per year within five years, by ramping up DJs private label, increasing volume and omni-channel initiatives, lowering the cost of sourcing and the introduction of WHL brands into DJs stores, an improved loyalty program and new "village format" stores.
David Jones shareholders will receive four Australian dollars, or $3.75, per share next month — at 25 times forecast 2014 earnings.
On Monday, S&P Dow Jones Indices announced that, subject to final court approval, it would remove David Jones Limited from the S&P/ASX 200 after the close of trading on July 18.
Madonna turns 59 today, marking another year of show-stopping, one-of-a-kind bold looks from the singer. To celebrate, we took a look at the superstar's most memorable fashion moments. Here, Madonna sits front row at Versace's spring runway show in 1995. See more exclusive photos from the #wwdarchive on WWD.com. #wwdeye (📷: Cédric Dordevic)
WWD asked a handful of creative directors to evaluate the September covers of leading women's fashion magazines. How do they think the covers this year compare with years gone by, and what do they say about the current status of the publication? Link in bio. (GIF by @hypebreast)
"Stephen King is such a master, but I don't like being scared - there's enough that's really scary. How about the morning's news?" says Holland Taylor in an interview with WWD. See what else the actress said about starring in the TV adaptation of King's thriller "Mr. Mercedes" on WWD.com. #wwdeye (📷: @jgreenery)