Solomon Lew + Mystery Investor To Block DJs Takeover?
After some confusion as to the identity of the mystery shareholder, David Jones was notified last week that S L Nominees Pty, of which Solomon Lew is a director, had purchased 3.5 million of company shares.
This equates to 0.65% of David Jones total shares issued.
It is believed Lew, a major player in the Australian retail sector, as Chairman of Premier Investments, owners of clothing retailers including Just Jeans, Portmans, Dotti, and Peter Alexander, could use his shareholding to block the proposed takeover of David Jones by Woolworths, worth around $2.15 billion. He may also increase his shareholding further in the coming weeks.
Fairfax Media reports: “It is understood that Mr Lew believes he has the experience and management team around him to better run David Jones than its current management and any strategies offered by Woolworths, and is a patient investor who will bide his time before pouncing on the department store chain.
“Mr Lew will remind undecided shareholders that David Jones shares once traded as high as $5.91 a share and the Woolworths offer seriously undervalues the retailer.”
DJ’s shares closed higher on Friday at $4.04, after the mystery shareholder was identified.
In April, David Jones announced it had entered a Scheme Implementation Deed (SID) with South African retail group, Woolworths. Myer previously had proposed a merger with the high end retailer, which was rebuked in favour of the South Africans higher value proposal.
The Woolworth’s takeover is being backed by DJ’s board and senior management, so Lew may have his work cut out to block the transaction. Shareholders vote on the deal at the end of the month.
Lew’s move could be a protectionist one, in a bid to block foreign competition heading up one of Australia’s largest department stores.
He has history with Woolworths and previously sought to block the South Africans from mounting a full takeover of Country Road, another retailer which it held a major stake in.
Update: Deutsche Bank is also building its shareholding in David Jones.
The investment group along with UBS now owns just under 7% stakeholding in the retailer, after major share movement late last week which saw 50 million shares snapped up, reports AFR.
DB may be acting for a client(s), believed to be UK and Australia-based fund managers along with others, which David Jones are now trying to identify as it moves closer to the June 30 shareholder vote on the takeover proposal.
DJS shares fell on early morning trading on the ASX to $4.0 – down almost 1%.
Image credit: Herald Sun