David Jones has postponed a vote to decide a takeover offer made by south african retailer Woolworths after Solomon Lew spent $275 million buying its shares.
This really throws a spanner in the works of the deal. There’s speculation he owns more than 10 per cent of the company now.
Since he won’t comment on his intentions, David Jones has decided to hold off until it can get a bit more clarity.
Media reports have suggested he could be hoping Woolworths is forced to buy his huge chunk of shares for a profit, or negotiate a separate deal around his stake in Country Road.
Whatever his intentions, his holding could be enough to scuttle the whole thing, according to Dean Paatsch, director of corporate governance advisory firm Ownership Matters, who told the Australian that, since David Jones has so many retail shareholders, only 60 per cent of the stock was likely to be voted.
This means Lew could block the takeover by securing a further five per cent — and he could do this by paying to “borrow” shares in the securities lending market.
“Delaying the meeting is the right thing to do until they find out what is going on,” Paatsch said in the report.
“The securities lending market has been very active for David Jones shares today, and it will take time to track down who is controlling the voting rights over those shares — the DJs share register is changing very, very quickly.”
Shares closed at $3.90 yesterday, after dipping slightly after the announcement. There’s more here.
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