The Myer board says Solomon Lew wants to take over without paying for it

Myer Spring fashion at Flemington Racecourse. Photo: Sam Tabone/WireImage

Garry Hounsell, the chairman-elect of Myer, has launched a counter attack against Solomon Lew’s Premier investments, which is agitating for board representation.

Hounsell, in a letter to shareholders, says the appointment of three directors related to Lew’s Premier Investments would result in its 10.77% holding controlling 43% of the non-executive board seats.

“The issue of Premier gaining control of Myer without paying you a takeover premium must not be ignored,” he says.

“You should note that Premier has only gone as far as to say that it has ‘no current intention of making a takeover offer for Myer’.

“Only Premier knows what its true agenda is for Myer and as your independent directors we have an obligation and duty to work in the best interests of all shareholders. Premier does not.”

A short time ago, Myer shares were down 2.5% to $0.77.

Hounsell says there are potential risks in allowing a competitor into the boardroom.

“We believe Premier’s campaign of hostility and obstructive actions shows it is acting for its own benefit rather than in the interest of all Myer shareholders,” he says.

However, billionaire retailer Lew last week described Myer as having lost its way.

Lew says he has no current intention of making a takeover offer for Myer, but his company will vote at the November 24 AGM against the appointment of all directors.

He says he will use the November AGM to express “complete disappointment and frustration” with the Myer Board of directors.

Lew says the New Myer strategy hasn’t made progress against any of its objectives after two years.

Last month Myer posted a 1.4% drop in sales to $3.2 billion, down 0.2% on a comparable store basis, for the full year. Net profit after tax was down 1.9% to $67.9 million.

In contrast, total sales for Premier were up 5.7% to $1.1 billion, with like-for-like sales 1.1% higher, for the latest full year.

Children’s stationery chain Smiggle was again the standout performer, with record sales of $238.9 million, up 28.81% over the 12 months.

Premier Investments, which also owns Just Jeans, Portmans and Peter Alexander, is run by former DJs CEO Mark McInnes.

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