South African retailer Woolworths will offer to buy Solomon Lew’s 11.8% stake in Country Road for $17 per share, in the hope it will prevent him from blocking the $2.2 billion David Jones takeover.
Woolworths has made an offer to buy David Jones however Lew has amassed a 9.89% stake in the Australia retailer, which carries Country Road products.
Country Road is majority-owned by Woolworths, and the theory is Lew wanted to force them to buy his stake if they didn’t want him to block the DJs deal.
The Australian Financial Review says Woolworths will also buy out the minority shareholders in Country Road in a deal that would be worth around $213 million if accepted.
It isn’t smooth sailing from here though, even if it goes ahead. If Lew is seen to receive a benefit which other David Jones shareholders did not, then the deal could run afoul of Australian corporate law.
There’s more here.