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Myer confirms merger offer

 

bernie_hawkins_myerDepartment store owner, Myer, says its proposed merger with rival David Jones would have created a business with more than $5 billion in sales.

Myer has confirmed it approached David Jones with the proposed $3 billion merger late last year but was rebuffed by the company’s board.

In a statement on Friday, Myer said it believed the merger would have created a sustainable and more competitive retailer with growth opportunities.

The merged entity would be better positioned to compete with the growing number of international retailers in the Australian market, it said.

“The merger would have further assisted Myer’s existing strategy in addressing the structural shifts in retail internationally,” the company said.

“Myer believed such a merger would have delivered compelling value for the shareholders of both companies, as well as providing strategic opportunities to grow both brands.”

The merged company would have operated Myer and David Jones as separate department store brands.

Myer said the combined retailer would have generated sales of $5 billion in the 2013 financial year and earnings of $364 million.

Meanwhile, the merger would have creates cost saving of more than $85 million a year.

The all-stock takeover proposal would have seen David Jones shareholders receive 1.06 Myer shares for every share they owned.

David Jones on Thursday said it rejected the deal because it didn’t represent sufficient value to its shareholders.

At 1048 AEDT, David Jones shares were up by 13.5 cents, or 4.7 per cent, to $3.01 while Myer shares were up 1.5 cents, or 0.58 per cent, at $2.585

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