The deal, which has been recommended to David Jones shareholders by its board of directors, is offering $4.00 for each share, about 25 per cent above the current David Jones share price.
In recent months David Jones has been the subject of recurring speculation about a takeover from competitor Myer but the new offer from Woolworth’s now makes that extremely unlikely. The offer is far beyond anything Myer is capable of making in the current retail climate.
Woolworth’s CEO Ian Moir annoucing the takeover bid.
Woolworth’s CEO Ian Moir annoucing the takeover bid.
There are many structural issues facing department store operations in Australia. Just a few years ago, David Jones shares were trading at $6. Today they are worth $3.19.
Woolworth’s is a respected and well-run company which also owns the Country Road, Mimco, Witchery and Trenery brands and is valued at $5.6 billion.
It’s CEO Ian Moir was formerly the CEO of Country Road and knows the Australian market place intimately, a fact seen by many commentators as a big plus for the offer.
When Woolworth’s took over Country Road a few years ago – it owns 90 per cent of the iconic clothing company – it’s share price was $3.33. It now trades at $15 and is considered one of the great resuscitations of Australian business.
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