The fourth largest shareholder in David Jones, funds manager Allan Gray, is urging the department store to reconsider a merger with Myer saying a $3 billion deal with the competitor “makes sense”.
Allan Gray director Simon Marais has said if the merger had gone ahead when it was proposed last year it would have seen DJs gain sales of $4.7 billion and earnings before interest and tax around $350 million, before any benefits, according to The Australian Financial Review.
“I think it makes sense,” Mr Marais said. “I think Australia is too small to have two stores like that. If you put them together there should be more profits in the overall pool.”
Allan Gray holds more than five per cent of David Jones.
While both retailers are under pressure from intense competition from foreign retailers as they look for new chief executives to replace David Jones’ Paul Zahra and Myer’s Bernie Brookes, Marais has said: “As long as we have good people it doesn’t matter where they come from.”
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