SYDNEY — Australian retail billionaire Solomon Lew is now the biggest shareholder in Australian department store chain Myer but said he has no current plans for a takeover bid.
In a statement to the Australian Securities Exchange on Wednesday, the Melbourne-based listed investment company Premier Investments Ltd., which is 42 percent owned and chaired by Lew, confirmed it was behind the mystery 101.3 million Australian dollar, or $77.2 million at current exchange, March 27 raid on Myer shares that sent them soaring 18.3 percent that day to a four-week high of 1.26 Australian dollars, or 96 cents.
Premier Investments said it had made a strategic investment of 10.77 percent in Myer Holdings Ltd., but advised “it does not currently intend to make a takeover offer” for the company.
“It doesn’t surprise me,” said IG market strategist Evan Lucas of Lew’s Myer move. “He had been looking for a tier-one investment vehicle in this space. Myer was probably one, if not the only, choice he had in the Australian market. It gives him scale in the discretionary apparel space, more than all of his competitors now.”
One of the most shorted stocks on the Australian Securities Exchange, Myer has been a rumored takeover target for years.
Eighteen months into a five-year turnaround strategy, the company — which operates 67 stores across Australia — is trading at a third of its October 2009 listing price of 4.10 Australian dollars, or $3.71 at average exchange.
Monday’s raid, through Lew’s longtime broker Blue Ocean Equities and clearing house Pershing Securities, triggered speculation that Myer could be in the sights of not just Lew, but also South Africa’s Woolworths Holdings Ltd., Edcon Ltd. and Steinhoff International.
The move recalled Lew’s raid on Myer rival David Jones in 2014, when he quietly acquired a 10 percent stake in David Jones after Woolworths Holdings’ had mounted a 2.2 billion Australian dollar, or $2 billion, takeover bid for the company.
Although Lew’s stake was insufficient to block the David Jones takeover, Woolworths paid a premium of 213 million Australian dollars, or $201 million, to buy out Lew’s 11.9 percent stake in Australian fashion chain Country Road, over which Woolworths also took full control in 2014. Both figures have been converted at average mid 2014 exchange.