Myer seeks to merge with Premier Investments’ Apparel Brands

Department store group Myer has proposed to combine its business with Premier Investments’ Apparel Brands, comprising Just Jeans, Jay Jays, Portmans, Jacqui E and Dotti.

The proposal is non-binding, indicative and conditional.

Myer proposes an all-scrip merger in which it would acquire Premier’s Apparel Brands – previously called the Just Group before Premier acquired the business in 2008 – in exchange for the issue of new Myer shares to Premier.

The merger would result in Century Plaza Investments – the private investment vehicle of Premier chairman Solomon Lew – and its associates becoming Premier’s largest shareholder.

“As part of this review, Myer is exploring both organic and inorganic investment opportunities that align with our strategic focus areas to create value for Myer shareholders,” said Olivia Wirth, Myer executive chairwoman.

“It quickly became clear that the idea of a combination of Myer and Apparel Brands offered significant potential synergies and prospects for growth, evidently warranting further examination.”

Apparel Brands has 717 stores across Australia and New Zealand, and generated revenues of $845 million in the last fiscal year.

Premier acknowledged there “may be a meaningful opportunity for both businesses from the proposal”.

The two companies have agreed to enter into reciprocal due diligence and further discuss potential transaction terms.

“The proposed combination has the potential to deliver a step change in Myer’s scale and market position, deliver synergies and drive sustainable earnings growth,” Premier said in a statement.

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