South African food and clothing retailer, Woolworth on Monday announced that it will not increase its offer for either David Jones or Country Road.
“What we have put forward is the best and final offer for David Jones (DJ) and Country Road companies” said Woolworth’s Chief Executive Officer, Ian Moir.
Woolworth has tabled a $2.1 billion offer for David Jones where it owns minority share at $3.8 a share. It has also placed a $16 per share deal for Country Road, for which it owns nearly 87.88 percent.
Woolworth is seeking to acquire both firms in a bid to become the leading retailer in the southern hemisphere.
The deal has however looks uncertain, as Australian Billionaire Solomon Lew who owns a 9.9 percent stake in David Jones and 11.88 percent interest in Country Road has not given his consent for the approval of the deal.
The offer to buy Country Road is dependent on Woolworth’s takeover of David Jones.
“I hope the shareholders of both companies takes this opportunity to exploit these offers as Woolworth will in the other hand, achieve its goal of acquiring 100 percent of both Companies,” Moir added.
Mr. Lew has not disclosed his intentions since he spent more than $175 million in acquiring DJs shares in May. There are speculations that he intends to make Woolworth buy him out of Country road at an inflated price.
The support of 50 percent of shareholders with at least 75 percent of the stock is required to secure DJ’s acquisition. A meeting has been scheduled for July 14th in Sydney. Only shares voted at the meeting will be counted.
If less than 75 percent of shares votes in favour of Woolworth’s acquisition at the meeting, Mr. Lew will have enough stake to block the deal. He can decide to borrow additional stock in other to secure the support of other major shareholders.
The stock of Country Road has increased from less $5 at the beginning of this year to $16.80 at the end of June following the announcement of a possible takeover. Woolworth’s shares were up by 0.98 percent to close at $7.3 while David Jones ended at $3.73.
