October 3, 2018 / 4:15 AM / 13 days ago

Top Myer shareholder seeks owner list, spurs M&A speculation

SYDNEY (Reuters) - Myer Holdings Ltd’s (MYR.AX) biggest shareholder has asked the Australian department store chain for a full list of its owners, stoking speculation that a takeover or board spill was in the offing and driving shares of the company up 9 percent.

FILE PHOTO: Shoppers use their phones as they walk past the entrance to a Myer department store, owned by Australia's biggest department store chain Myer Holdings Ltd, in Sydney, Australia, November 1, 2017. REUTERS/Steven Saphore/File Photo

Premier Investments Ltd (PMV.AX), chaired by billionaire retail tycoon Solomon Lew, said in a statement that it wanted the complete list, which is not publicly available, so it could “consider writing” to shareholders ahead of Myer’s annual general meeting (AGM) in November.

Premier made a similar request a year ago, before mounting a failed attempt to install three directors on a board Lew says has been unable to prepare the 118-year-old company for an explosion in online shopping.

This time, however, the move follows turmoil at the top of the struggling retailer that hired a new CEO in June and posted its first annual loss since listing in 2009.

Shares of Australia’s biggest department store owner jumped 8.8 percent to a near two-week high on Wednesday as Premier’s latest move fuelled speculation of a takeover bid.

Signs for one of Australia's Myer Holdings Ltd's retail stores is seen on the outside of the building in central Sydney, Australia, February 19, 2018. REUTERS/David Gray

The stock settled about 4 percent higher, in a broader market that was steady.

“Clearly the market moves show some people think this is a pre-empt to (a takeover) offer,” said Michael McCarthy, chief strategist at stockbroker CMC Markets.

“I think that’s possibly getting ahead of the game, but until Mr Lew reveals his hand, we simply don’t know.”

A Premier spokeswoman did not provide any more details on the matter when contacted by Reuters, while a Myer spokesman declined to comment.

Under Australian law, Myer must provide the share registry list to Premier within seven days.

BOARD SPILL?

Myer has been under pressure from Lew since a few months after he bought a 10.8 percent stake in Myer last March, when its shares were trading at more than double their present value.

It has also had to contend with sluggish consumer spending in Australia, weighed by slow wage growth, as well as growing competition from internet giants like Amazon.com Inc (AMZN.O) that have undercut business by selling more products for less.

Lew marshalled enough support, more than a quarter of shareholders, to vote down Myer’s executive pay proposals at last year’s annual meeting.

If pay proposals are rejected for a second straight year at the upcoming AGM, then under Australian corporate law, Myer must give shareholders the option to replace the board.

A board revamp would, however, need to backed by a majority of its shareholders and at least one large shareholder told Reuters that the new CEO John King, who is in the midst of overhauling the company, deserves more time.

King has already outlined plans to cut floor space and middle managers, end stock clearance sales and overhaul the company’s online offerings.

“To me this is a time for stability and to let the new management team perform,” said Geoff Wilson, chairman of fund manager Wilson Asset Management. “The early signs are positive in a retail environment which is particularly challenging.”

Reporting by Tom Westbrook. Additional reporting by Nikhil Kurian Nainan in BENGALURU; Editing by Himani Sarkar

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below