Myer had proposed a “merger of equals” that would have seen David Jones investors swap their shares for stock in the merged entity.
But the proposal was rejected by the David Jones board in favour of a more attractive bid from South African-based Woolworths and Myer on Wednesday said it had withdrawn its offer.
“While we believe in the strategic merits of our proposal and the potential value accretion for both sets of shareholders, we have always maintained a disciplined approach to valuation, and as a consequence we will advise David Jones today of the withdrawal of our proposed merger of equals,” the company said in a statement.
Woolworths, which is not related to the Australian supermarket giant, will pay $4 for every David Jones share – 25 per cent above their $3.19 closing price on Tuesday.
Myer CEO Bernie Brookes said the company would instead focus on boosting its own profitability.
“Myer remains fully committed to continuing to progress our well-established five-point plan with a number of new initiatives to drive sales and profitability while continuing to invest in the growth areas of the business,” he said.
Myer shares had lifted 13 cents, or more than five per cent, to $2.43 at 1130 AEST.