Basement bargaining

1 March 2018 By Clara Ferreira Marques Follow @ClaraMarquesRTR

Aggressive investors can benefit other shareholders but maybe not at Myer. Solomon Lew’s Premier Investments slams the retailer’s board but offers only generic fixes, while he also has conflicts of interest. Sadly, there are no easy levers anyone can pull to boost value here.

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Myer Holdings, Australia’s largest department-store chain, said on Feb. 14 that chief executive Richard Umbers would step down. The company said Chairman Garry Hounsell would become executive chairman immediately, while it looks for a new CEO.

On Feb. 9, Myer warned net profit after tax for the six months to late January would fall up to 41 percent year on year, after worse-than-expected trading over Christmas and in the subsequent sales. NPAT, the company's preferred measure of earnings, excludes restructuring costs. Myer does not expect trading conditions to improve in the second half of its financial year.

Myer was formerly owned by private equity. Its shares listed at A$4.10 in 2009 but have never traded above that issue price. They were trading at around A$0.44 on March 1.

Premier Investments, led by billionaire Solomon Lew, holds 10.8 percent of Myer shares and has sought to replace Myer’s board.

In a Feb. 19 letter, Lew told Myer shareholders that Premier plans to call an extraordinary general meeting and seek to bring in a new board.

Myer is due to announce half-year earnings on March 21.

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