Someone raided Myer (MYR) yesterday, snapping up 10% of the retailer’s issued capital and driving the share price up 18%.
At the market close, Myer shares were up 18.3%, its biggest ever gain, to $1.26 a share, taking the valuing the retailer at just over $1 billion, up from $875 million last Friday.
By 5pm Sydney time about 117 million Myer shares had changed hands, around 14.2% of issued capital, with a line of 81.7 million shares trading at $1.15 – 9 cents above Friday’s close.
It was the second Monday in a row that a raid has been staged on a big Australian company. A week ago yesterday Downer (DOW) nailed down 19.9% of Spotless (SPO) and then launched a $1 billion rights issue to finance a $1.3 billion bid for the services group.
That bid remains current, but Downer shares have been smashed as big shareholders provided less than wholehearted support for the rights issue, with retail shareholders expected to give half hearted support to the $254 million issue now open.
Most speculation that Melbourne retailer, Solomon Lew was behind the buying through his Premier Investment company.
Pershing Securities is rumoured to be the purchaser of the large chunk in Myer.
Three years ago when upmarket department store David Jones was under takeover offer from South Africa’s Woolworths Holdings, Mr Lew threw a spanner in the works and nearly derailed the entire bid after he used Pershing to buy 9.8% of David Jones issued capital.
He used the stake to extract around $200 million from South Africa’s Woolworths Holdings which had bid $2.2 billion bid for David Jones. Woolworth also controlled 88% of Country Road, with Mr Lew holding another 11%. He forced Woolworths to buy him out of that stake as well.
Mr Lew has a long history with Myer, having been a director and chairman of Coles Myer when the conglomerate was created more than two decades ago and many of his privately owned retail fashion businesses supplying the department store. There were also a couple of controversial moments, most notably the Yannon transaction.
However, Mr Lew has previously dismissed suggestions he was interested in buying Myer.
Myer listed in 2009, with its shares opening at $4.10, and then began a long slide that saw the shares fall under $1 last year as the department store failed to lift earnings and sales.
Under newish CEO, Richard Umbers, Myer has improved its performance over the last year and is on track to report its first lift in annual profit in seven years.
Downer shares by the way rose 3% to end at $5.72 yesterday, still 23 cents under the issue price of $5.95, and 25% under the $7.42 Downer shares were trading at a week ago yesterday.
