SYDNEY, March 18 David Jones Ltd,
Australia's second-biggest department store chain, said it will
investigate the value of a proposed merger with Myer Holdings
Ltd, the strongest sign yet that it will consider the
A$3.4 billion ($3.09 billion) deal.
A day before it reports half-yearly earnings, David Jones on
Tuesday said it had hired management consultant Port Jackson
Partners Ltd to assess the value of "synergies that can be
extracted if David Jones and Myer were to merge".
David Jones rejected a takeover bid from larger rival Myer
last year but Myer in February asked the Sydney-based upmarket
retailer to reconsider the offer. Both companies have valuable
property assets although they have struggled with soft consumer
confidence, patchy retail spending and failure to grasp
opportunities in online retailing.
David Jones said it would conduct due diligence on Myer if
discussions progressed, requiring the Melbourne-based company's
"Once this work is completed we will be in a position to
engage in a meaningful way with Myer," David Jones Chairman
Gordon Cairns said in the statement.
Both companies' chief executives had been due to leave but
Myer, in its second approach to David Jones on Feb. 20, said its
CEO was staying on, a move widely seen as a sweetener for a
Then on March 11, David Jones said its CEO was also
reversing his decision to leave and would stay.
David Jones's last public statement on the Myer proposal was
a response to its Feb. 20 approach, saying it would consider
"any proposal which is on terms that are in David Jones
shareholders' best interests".
David Jones shares were trading almost 2 percent higher at
A$3.34, having risen 17 percent since Jan. 30 when it first
disclosed the Myer merger proposal. Myer shares were up 1
percent, in line with the broader market.
($1 = 1.0999 Australian Dollars)
(Reporting by Byron Kaye; Editing by Stephen Coates)