Home > Industry > David Jones In Talks To Buy Myer, Shares Soar 8%

David Jones In Talks To Buy Myer, Shares Soar 8%

UPDATE – Following the news David Jones is considering buying Myer, shares in Myer have soared 8.7% by midday today.

Recent reports reveal David Jones is considering the acquisition of rival Myer, in a bid to increase its bargaining power with landlords. The news follows Myer’s recent $476 million half-year loss, and market value notching a new low of $296 million yesterday.

According to The Australian, advisers have been engaged, and sources affirm David Jones’ takeover of Myer has always been a consideration.

Myer has reportedly engaged Flagstaff and Goldman Sachs, alongside speculation Myer’s board contacted David Jones about a potential purchase.

Following the departure of Chief Executive Richard Umbers early this year, Myer has yet to appoint a replacement. In the interim Executive Chairman, Gary Hounsell, has largely been steering ship.

As previously reported, Myer has ruled out voluntary administration, despite speculation it would use the strategy to re-negotiate rents with landlords. Analysts warn the retailer is edging closer to breaching its debt covenants within banking agreements.


David Jones acquisition of Myer will allow it to better negotiate rents with landlords, such as Westfield’s Scentre Group.

Back in 2014, Woolworths purchased David Jones, however the department store has also faced struggling sales in recent times.

As previously reported, many Australian analysts affirm national demand is only sufficient for one major department store. Competition is only set to intensify following the growth of e-commerce giants such as Amazon Australia.

The Australian reveals David Jones’ boss, Ian Moir, may consider acquiring Myer for a little over $300 million, in what could be a high-risk strategy to lift sales and profits.

Should Myer fall into voluntary administration, David Jones’ South African parent company will likely receive the company at a much lower price.

The news comes as Australian department stores posted a surprising 1.5% sales increase in February, which commentators state was spurned by the timing of Chinese New Year.

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