ASX-listed Premier Investments (ASX:PMV) announced on Monday it has received a merger proposal from Australian national retailer Myer.
Myer would acquire Premier’s apparel brand business (including Just Jeans, Smiggle and Jay Jay’s) in exchange for shares to Premier.
Premier increased its stake in Myer to over 30% in April of this year and Citi analysts noted Premier could ultimately take a controlling stake. The company been incrementally increasing its ownership in Myer in recent history.
That comes in the context of a decline in commercial real estate through COVID as lockdowns changed shopping habits; a post-pandemic cost of living crisis is also rattling (but not drowning) surprisingly resilient consumers.
Notably, the deal includes that Premier no longer owns shares in Myer.
“Premier shareholders would become Myer shareholders directly, whilst also retaining their existing Premier shareholding,” the company wrote on Monday.
Premier Investments, however, want to install chair Solomon Lew on Myer’s board. Shareholders probably won’t mind, given PMV shares are up 52% over the last year.
PMV has already got UBS Securities looking at the deal; in the background, Premier is working to get rid of Smiggle and Peter Alexander.
With that said, Premier wrote “the proposal warrants further consideration” – perhaps not the world’s most enthusiastic language.
PMV last traded at $29.94.