News Column

David Jones delays vote

June 20, 2014

SYDNEY: Australian department store operator David Jones Ltd said it will postpone a shareholder vote on a $2 billion (R212.8bn) takeover bid from South Africa'sWoolworths Holdings Ltd until next month after Australian billionaire Solomon Lew said he had bought a 9.89 percent stake in the target.

David Jones, the country's No. 2 retailer by sales, said yesterday it has obtained court permission to postpone the meeting originally scheduled for June 30 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 A$200 million (about R2 billion) by market value, was made public on Wednesday.

The postponement clouds a takeover which has already been re-commended 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 percent of David Jones according to a May 30 securities exchange filing. A spokes-person for Lew was not immediately available for comment.

But investors expect he will use it to force 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 - 11.88 percent, and |worth A$170m - for 17 years, preventing Woolworths from taking full ownership.

The David Jones deal requires approval from 50 percent of shareholders controlling at least 75 percent 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 percent, meaning Lew could have enough stock to affect the vote.

David Jones were steady at A$3.90 ($3.67) in a sharply higher overall market. - Reuters

Cape Argus

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Source: Cape Argus (South Africa)

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