David Jones agrees to takeover by South Africa's Woolworths
THE board of David Jones has agreed to a takeover offer from South Africa's Woolworths for $2.15 billion.
It announced today it had entered into a Scheme Implementation Deed with the South African-based retail group.
Under the agreement, Woolworths will acquire all outstanding David Jones shares for $4 per share.
In a media statement, the board said the cash payment represented a 25.4% premium to the closing price of David Jones shares on April 8, 2014.
David Jones Chairman, Gordon Cairns, said David Jones was an iconic brand with a long and justifiably proud history.
"This is a compelling proposal which represents a significant premium to not only our intrinsic value but also to broker valuations and to recent share prices. It represents a substantial earnings multiple," Mr Cairns said.
Woolworths's Chief Executive Officer, Ian Moir, said Woolworths was a very similar business to David Jones, closely aligned in terms of target markets and values.
"The combination will create a leading southern hemisphere retailer with meaningful scale, able to leverage common fashion seasonality with enhanced sourcing capability," Mr Moir said.
"We will work with the David Jones team to deliver the sound strategies they have already set in place. Woolworths
will bring extra capability, financial strength and significant scale to accelerate these strategies and offer a
greatly enhanced value proposition, delivering on-trend product within the most exciting and innovative
shopping experience in the market."
The implementation of the scheme is subject to conditions including the requisite majorities of David Jones shareholders giving their approval and approval from the under Australia's foreign investment rules.
It is also subject to Woolworths obtaining South African Reserve Bank approval.