The Clayton’s Take-over of Myer Limited

Sacked former Director of Coles Myer, experienced retailer Solomon Lew, has been an observer whilst the re-floated Myer Limited has floundered, and destroyed the wealth of its backers.

From $4.10 when floated, it has reached support at a low of 84 cents at the close of trade on Friday May 26, 2017.

When Premier Investments, Solomon Lew’s successful listed retail vehicle, took a 10.77% stake on the register of Myer Limited, the obvious deduction was that this might trigger a contest for control of its depreciated assets.

South African Woolworths the owner of rival high-end retailer David Jones, one would think, might dearly love to rationalize the operations of Myer with its own, and obtain significant synergies.

Solomon Lew has made a considered decision, backed with his own money since Century Plaza, his own personal investment vehicle, has also taken a 10.77% stake. He stated at the outset that he did not intend to make a full take-over for Myer. His goal, it would seem, is to block potential control by any corporate raider, and to ensure that the interests of Premier Investments are not jeopardized.

No doubt he would be advantaged by control of Myer, but to date he has not approached  Myer, seeking board representation.

The story unfolding is intriguing. One reason why the market has reacted in a contrarian manner, is the recent pull-back in retail sales, and the prospect of an influx of cheaper products when Amazon establishes its presence in Australia shortly.

This is a weekly chart of Myer Limited since inception, showing its decline. Hopefully the next few months will see its resurrection, rather than demise,  led by a wily Solomon Lew. It has the assets for there to be a turn-around in its fortunes.

The decline of Myer

Readers are advised to seek professional stock-broking advice before investing in this stock.



Categories: Chart Analyses, Trading opinion, Uncategorized

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