Australia's David Jones postpones Woolworths $2 bln takeover vote

by Reuters 0

The Australian department store operator wanted the bid postponed to mid-July after Australian billionaire Solomon Lew said he had acquired a 9.89 per cent stake in the target.

David Jones, the country’s No. 2 retailer by sales, said on Thursday it has obtained court permission to postpone the originally scheduled June 30 meeting until July 14 “to allow sufficient time for the David Jones Board to assess the implications” of Lew’s investment. The Lew stake, worth about 200 million Australian dollars by market value, was made public on Wednesday.

The postponement clouds a takeover which has already been recommended by the David Jones board, and secured overwhelming support from Woolworths shareholders two days ago.

Melbourne-based Lew, who owns interests in a range of Australian clothing retailers, has yet to declare his reason for amassing his stake so quickly – he owned just 0.65 per cent of David Jones according to a May 30 securities exchange filing. A spokesperson for Lew was not immediately available for comment.

But investors expect he will use it to force [DATA WHL:Woolworths] either to lift its offer or buy out his stake in its other Australian investment, clothing retailer Country Road Ltd . Lew has held his Country Road stake, currently 11.88 per cent and worth 170 million Australian dollars, for 17 years, preventing Woolworths from taking full ownership.

The David Jones deal requires approval from 50 per cent of shareholders controlling at least 75 per cent of the stock. But only votes cast at the meeting are counted: at regular shareholder meetings David Jones historically has had turnout as low as 50 per cent, meaning Lew could have enough stock to affect the vote.

David Jones were steady at 3.90 Australian dollars in a sharply higher overall market.