Premier’s shareholders are backing Solomon Lew’s reignited attack on Myer’s board, but are reluctant to follow it through to a full takeover.
The department store’s board appear to be willing to work with Lew to some extent – having offered Premier Investments representation on the board now that the business bought up additional stock – but have asked Lew to end the “distraction” of calling for the full board’s resignation.
“We have the right team and are well positioned to build on this to create value for all shareholders,” said Myer acting chairwoman JoAnne Stephenson, according to The Australian.
“The board is focused on ensuring that [Myer CEO] John King and his management team are able to execute the all-important peak trading period without distraction.”
Lew responded to Myer’s offer, and said he is not interested in working with the current Myer board.
“Premier has nothing to gain from spending time with the members of the current Myer Board. The failure to appoint a permanent Chairman or any additional non-executive Directors seems to indicate that no credible company director would accept an offer to work with the current Myer Board,” Premier said in a statement.
“The only thing Premier will accept from the current Myer Board is the resignation of its three remaining non-executive directors.”
A number of Premier shareholders have backed Lew’s latest move on Myer, with some expecting Lew to do a better job of running the struggling department store than its current management team.
“The Premier management team have demonstrated what quality of management they have relative to a lot of other retailers,” an anonymous fund manager told the AFR.
“Given their performance, if you’re a shareholder you’d back the Premier team to do a better job of Myer than the current management team.
“I’m not sure he’s willing to take it over quickly and go the full hog – that’s a different proposition.”
If Stephenson and her fellow board members are to welcome a Premier nominated newcomer to the board, they’ll first need to deal with any potential conflict of interests that could arise from Premier being on the board while also one of Myer’s biggest suppliers.