Myer: the new Breville for Premier Investments?

There has been a lot of press on Solomon’s intention on Myer. Should we as retail shareholders vote to support Solly candidate to be voted in as non exec director?

The key question now for all of us is: Is Solomon’s intention to fully takeover Myer?

It is quoted that the creep approach adopted by other billionaires is being imitated by Solly. However I am of the opinion that it’s a mix of success and failure. If the creep approach of taking over a company has a high chance of success, we shouldn’t need to see so many companies lobbing a full takeover offer with premium.

All that it takes is for a cashed up fundie or someone on the rich list to take say 10-15% of Myer shares to gatecrash Solly’s attempt to takeover without a premium, just as how Solly himself did it to the Woolworths SA group with Country Road.

For those interested in reading more on creep strategy of takeover, you can read this:
https://corporatefinanceinstitute.com/resources/knowledge/deals/creeping-takeover/

My interpretation is that Solly is still keeping his options open. If he truly wanted to takeover Myer, shouldn’t it be that he would have done it during the peak of coronavirus when Myer shares were down in the doldrums? Why does he need to wait for Myer to show signs of strength before he lobs a takeover? In fact Myer couldn’t be in a better position than before with its sales back to where it was, and now is the time to eke out more profitability from the sales.

Or is Solly doubtful of the future, hence he needs more certainty on the general business environment first prior to making a big move?

The more I think of it as I write this, the more I’m thinking that Solly may be looking at Myer more like how he looked at Breville. Premier Investment owns more than 28% of Breville and since the attempted takeover by GUD of Breville for around $322M in 2009 which was subsequently rejected, Breville is now a $2.65Bln market cap company, with a lot of success being attributed to having Premier Investments involvement in its business through having representatives on its board. Back in 2009, Premier Investments kept reiterating that they did not intend to take over Breville, and sure, they stuck to their word.

I have just received the voting documents for the AGM. If by having Premier Investments onboard, I can see Myer shares almost 8 times its current value (as like how Breville grew), hell yeah, I want them to be involved in the transformation of Myer. Obviously my vote won’t matter much as I only have a couple hundred thousands of shares. I will leave the verdict to you fellow retail shareholders.

(I must say I have not seen the above thought being articulated by the press lately, but I may be wrong. Maybe I should increase my shareholding to 500k shares. And maybe, our fellow journalists here will publish this story on AFR and the Australian )