SYDNEY, Feb 20 (Reuters) - Myer Holdings Ltd, Australia’s biggest department store chain by sales, has asked David Jones Ltd to reconsider a takeover bid, saying Myer’s departing chief will stay on and so could lead the A$3.1 billion ($2.80 billion) combined entity.
Myer in October offered to buy No.2 rival David Jones at market value to increase their competitiveness. But David Jones, which had a market capitalisation of A$1.7 billion as of Thursday, rejected the offer.
The pair have seen sales fall over the past few years as shoppers go online, but a recent pick-up prompted David Jones’ chief last month to backtrack on a resignation announced in October, local media reported.
In a letter included in a statement to the Australian Stock Exchange on Thursday, Myer Chairman Paul McClintock asked David Jones Chairman Peter Mason for his “agreement and support” to discuss a “merger of equals, with neither party taking or ceding control”.
Myer has re-appointed Chief Executive Bernie Brookes, who was scheduled to leave in August, on an indefinite basis, making him “available to lead the combined company should the merger occur”, McClintock wrote.
Brookes is Myer’s No.10 shareholder with a 1.71 percent stake, according to data compiled by Reuters.
Myer shares rose 4 percent and David Jones shares rose 1.6 percent on Thursday in a flat overall market.
David Jones said it planned to make a statement on the matter later in the day.
$1 = 1.1071 Australian dollars Reporting by Byron Kaye; Editing by Christopher Cushing