Woolworths’ Nemesis Lew Buys David Jones Shares in Threat to Bid
Solomon Lew, the Australian retailer who’s blocked Woolworths Holdings Ltd. from taking full control of a local fashion chain since 1997, bought shares in David Jones Ltd. amid a $2 billion bid by the Cape Town-based company.
Lew’s SL Nominees Pty. has bought 3.5 million shares in David Jones, or about 0.65 percent, the Sydney-based department store said in a regulatory statement today. He could force a bidding war if he can pick up 5 percent of the stock, said Evan Lucas, a market strategist at IG Ltd.
“History would suggest that he’s very good at being a thorn in the side,” Lucas said by phone from Singapore. “When he gets stubborn and puts his foot down, he tends to win.”
Lew, a former Reserve Bank of Australia board member, has blocked Woolworths from taking full control of apparel store Country Road Ltd. (CTY) since 1997 through a stake of about 12 percent held by his company Australian Retail Investments. To stop Woolworths acquiring David Jones, Lew would need at least 25 percent of the company’s shareholders to oppose the offer.
David Jones today rose above Woolworths’ A$4-a-share offer for the first time since the bid was announced April 9, and closed at A$4.04 in Sydney.
“It is not for us to speculate on why Mr. Lew, or anyone else, has bought shares in David Jones,” Angus Urquhart, an external spokesman for Woolworths at Hintons & Associates, said by phone. “Our offer is in cash and is recommended by the David Jones board.”
Lauren Thompson, a spokeswoman for Lew’s fashion and stationery group Premier Investments Ltd. (PMV) at Domestique Consulting, declined to comment. Helen Karlis, a spokeswoman for David Jones, didn’t respond to a call left on her phone.
Woolworths Holdings isn’t related to Woolworths Ltd., the supermarket chain that’s Australia’s biggest retailer.
Premier Investments, the fashion and stationery group that counts Lew as chairman and 42-percent shareholder, had A$222 million ($207 million) of net cash at the end of January, according to data compiled by Bloomberg. It might offer to take over David Jones or rival department store Myer Holdings Ltd. (MYR), the Australian Financial Review reported Jan. 2, 2013, without saying where it got the information.
Mark McInnes, who was chief executive officer of David Jones from 2003 until 2010, now works alongside Lew as retail chief executive of Premier Investments.
“Solomon Lew and Mark McInnes have an interest in David Jones for both personal reasons and profit reasons,” Lucas said. If Lew can acquire more than about 5 percent of the stock, “he brings Woolworths into a bidding war and the question is how far can he go?”
To contact the reporter on this story: David Fickling in Sydney at email@example.com
To contact the editors responsible for this story: Stephanie Wong at firstname.lastname@example.org Edward Johnson, Peter Vercoe