Woolworths to acquire Australia’s David Jones - CNBC Africa

Woolworths to acquire Australia’s David Jones

Southern Africa

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Woolworths Holdings Limited operates in Australia through its subsidiary, Country Road Group. PHOTO: Tyger Valley

The South Africa-based retail group has offered 21.4 billion rand to acquire David Jones Limited’s entire issued share capital, for a cash consideration of 4.00 Australian dollars per share.  

“This transaction provides us with the scale and opportunity to deliver significant benefits to our shareholders, and our customers in South Africa and Australia. Woolworths is a proudly South African company with an enviable history and track record,” said [DATA WHL:Woolworths Holdings Limited]’s (WHL) chief executive, Ian Moir.

“Our businesses are closely aligned in terms of our target markets and we look forward to growing a southern hemisphere champion from our South African base. The combination will create one of the world’s largest department stores with meaningful scale, able to leverage common fashion seasonality with enhanced sourcing capability.”

(READ MORE: Woolworths pulls the plug on Nigeria)

WHL, which operates in Australia through its subsidiary, Country Road Group, plans to accelerate David Jones’ strategic initiatives to consolidate and grow its competitive position and performance.

“We will work with the David Jones management team to deliver the sound strategies they have already set in place,” Moir explained.

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“Woolworths will bring additional capabilities, financial strength and significant scale to accelerate these strategies and offer a greatly enhanced value proposition, delivering on-trend product as part of the most exciting and innovative shopping experience in the market.”

The transaction will be implemented by way of a scheme of arrangement between David Jones and its shareholders.

(READ MORE: Woolworths turnover up 23.2% from strong sales)

WHL intends to fund the offer consideration through a combination of existing cash, new debt facilities and equity funding to be raised by an underwritten renounceable rights offer.

“Our significant presence in Australia commenced over 15 years ago with Country Road and we look forward to strengthening it further as we build David Jones into a business much better positioned to compete successfully in the southern hemisphere retail market of the future,” said Moir.

“We believe this is a compelling offer, with a premium that reflects our high regard for the business, but also an opportunity to secure a strong and vibrant future for David Jones and its customers.”

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