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David Jones reconsiders merger plan with Myer Holdings

RBR Staff Writer Published 18 March 2014

David Jones, Australia's second-biggest department store chain, announced it will investigate the value of a proposed merger with Myer Holdings, a deal which is valued around A$3.4bn ($3.09bn).

David jones

Following this, the retailer also hired management consultant Port Jackson Partners to oversee the value of synergies that can be extracted if David Jones and Myer were to merge.

In addition, an assessment of the value that can be derived for shareholders if David Jones continues with the implementation of its future strategic direction plan on a stand alone basis will be undertaken.

If discussions on the proposal, which is premised on a share swap, advance between both the parties, David Jones will then undertake a due diligence assessment of Myer's business which it says would require the target's co-operation.

David Jones chairman Gordon Cairns said this initial strategic work, prior to commencing discussions with Myer will enable the company to have a full understanding of the value that can be delivered to shareholders if David Jones were to merge with Myer versus the value that can reasonably be expected to be delivered to shareholders if the company continues with its future strategic direction plan on a stand alone basis.

"Once this work is completed we will be in a position to engage in a meaningful way with Myer."

Also, David Jones announced that Leigh Clapham has tendered his resignation as a non-executive director of the board, with immediate effect.

David Jones rejected a takeover bid from rival Myer in 2013, however, Myer in February asked the Sydney-based upmarket retailer to reconsider the offer.

Founded in 1838, David Jones currently has 38 stores located in most Australian states and territories.

Image: David Jones at Queens Plaza, Brisbane. Photo: Courtesy of Figaro.