 The move comes in advance of the David Jones shareholder vote to decide if Woolworths’ proposed $2.2 billion takeover of David Jones, should go ahead.
The vote is due to take place next month, having been pushed back after it emerged Premier Investments boss Solomon Lew was building a stake in DJ’s. The canny investor was believed to be using his shareholding in DJs against the South Africans, forcing their hand on buying his minority share in Country Road.
South African-based Woolworths has an 87.8% share in Country Road, with Lew being left stranded for some time as a minority shareholder, with an approximate 11.8% stake.
However, Lew got his own back, building a 10% stake in DJs over the past number of weeks – meaning he could, in effect, prevent the proposed $2.2bn takeover of David Jones by the South Africans. DJs board are in favour of the deal.
“Woolworths has agreed to acquire all of the ordinary shares that it does not already own in Country Road Limited at a price of A$17.00 per share,” the company said in an ASX release.
The deal would be worth $213 million, in total, with Lew being the primary beneficiary.
Last week, David Jones moved to postpone the shareholder vote by two weeks after Lew’s investment in DJs’ came to light.
DJ’s shares rose 4.49% to $3.96, following today’s takeover announcement by Woolworth’s.
“Achieving full ownership of Country Road is a logical next step and in line with WHL’s longstanding desire to acquire 100% of Country Road,” Woolworths said, citing the “synergy benefits” arising from full ownership of the clothing retailer and the acquisition of David Jones.
Woolworths Chief Executive Officer, Ian Moir, who has previously locked horns with Lew over Country Road, said, “In light of the proposed acquisition of David Jones, this is a common sense and timely opportunity to seek to reach full ownership of Country Road.”
If successful, the offer will allow Woolworths to delist Country Road, allowing to it to simplify its group structure and fully integrate the businesses.
In a statement today, David Jones said it noted the takeover announcement made by Woolworths. The takeover bid is conditional on DJS takeover by Woolworths becoming effective.
“Today’s announcement does not impact the timing of the David Jones Scheme Meeting scheduled to take place on 14 July 2014.”
The company Board says it “continues to assess the implications” of the 9.89% stake in David Jones that Lew holds and notes further developments could result in a further postponement of the shareholder meeting.
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