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South Africa's Woolworths moves on Australia's Country Road/AFP


SAfrica’s Woolworths moves on Australia’s Country Road

South Africa's Woolworths moves on Australia's Country Road/AFP

South Africa’s Woolworths moves on Australia’s Country Road/AFP

SYDNEY, Jun 24 – South African retail giant Woolworths Tuesday announced a bid to buy out Australian fashion chain Country Road as part of its plan to takeover prestigious department store David Jones.

Woolworths already owns 87.88 percent of Country Road but is offering Aus$17.00 per share for the remainder — a 21.4 percent premium on Monday’s close, it said.

The offer amounts to a total cash consideration of Aus$213 million (US$200.7 million) for a stock that was trading at around $4.0 a share six months ago, before Woolworths’ David Jones bid was announced.

Woolworths said given its tilt for David Jones, it was a timely to seek full ownership of Country Road.

“Given the role of Country Road in realising a substantial part of the synergy benefits arising from the … acquisition of David Jones, achieving full ownership of Country Road is a logical next step and in line with Woolworths’ long-standing desire to acquire 100 percent of Country Road,” chief executive Ian Moir said.

If successful, the offer will allow Woolworths to delist Country Road, permitting the South African company to simplify its group structure and fully integrate the businesses, he said.

Woolworths hopes its Aus$2.1 billion takeover bid for David Jones will allow it to become one of the 10 largest department store operators in the world.

Its offer for Country Road is subject to the scheme of arrangement for David Jones becoming effective and approval by the Foreign Investment Review Board.

The board of David Jones unanimously backs the Woolworths proposal, and has recommended that shareholders vote for it in the absence of a superior proposal.

However, the department store noted that entities associated with billionaire Australian business identity Solomon Lew hold about 11.8 percent of Country Road, as well as about 9.89 percent of David Jones.

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Lew is reportedly the biggest shareholder in David Jones and The Sydney Morning Herald said he was believed to be threatening to block the David Jones deal unless Woolworths bought his Country Road stake at a premium.

Woolworths made a Aus$2.00 per share takeover for Country Road in 1997, the Herald said, which was blocked by Lew’s Australian Retail Investments.

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