Myer May Borrow Money To Make Its Merger Offer More Attractive To David Jones: Report

Myer boss Bernie Brookes (Photo: Getty/Lisa Maree Williams)

Department store chain Myer may borrow up to $500 million to make its merger offer more attractive to rival David Jones, according to the AFR.

David Jones rejected the initial “merger of equals” because it didn’t think the all-script deal provided enough of a premium.

Myer shares have fallen 14 per cent to $2.29 since last week. The company has the capacity to borrow up to $500 million after reducing its net debt to $230 million and cutting gearing to about 20 per cent in the past year.

Considering the fall, a cash-and-script offer would likely be needed to peak David Jones’ interests. Last October, when it approached DJs, Myer offered 1.06 of its shares for every David Jones share, which would have given both an equal share in the combined entity.

Meanwhile, yesterday Myer announced it had hired investment bankers from Macquarie Capital Partners to assist its long-term advisers Gresham Partners Advisory.

There’s more here.

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