Shares in retail group Just Group (JST) rose as much as 13% today after it was named as a takeover target by Premier Investments, whose bid values the retailer at $898 million.
Under the terms of the offer, Premier is offering $2.20 in cash and 0.25 Premier Investment shares for each Just Group share, valuing each JST share at $4.11 – $4.46.
Just Group which owns the Jacqui E, Just Jeans, Dotti and Jay Jays brands has not yet responded to Premier’s offer. Premier Investments (PMV)’s offer is subject to a minimum acceptance condition of more than 50% of Just Group shares.
“This offer provides Just Group shareholders with an attractive premium, substantial cash value, as well as a continuing stake in the future growth of Just Group and the potential upside of Premier through a generous scrip component,” Premier chairman Solomon Lew said.
“At a time of significant economic uncertainty and market volatility, the combined elements of cash and Premier scrip in this offer are compelling for Just Group shareholders,” he said.
Just Group’s share price decline has been in line with the performance of the S&P/ASX 300 Retail index, which has fallen 32.7% between 1 October 2007 and 28 March 2008.
Premium Investments said in the takeover statement, that this substantial decline reflects investors’ concerns about the worsening broader economic environment and its likely negative impact on the retail sector.
Premier Investment last month increased its investment in Just Group to 22.8%, having built a stake over the past few years.
It specialises in investment in listed securities and has been listed on the Australian Securities Exchange since 1987.
Shares in JST surged 12.5% or 44 cents to $3.96, whilst PMV stayed unchanged at $7.90.
