Terry McCrann: Why Myer’s board is making a big mistake by trying to stare down Solomon Lew

THE board of struggling department store chain Myer is making a huge mistake by trying to stare down retail magnate Solomon Lew, writes Terry McCrann.

RICHARD and — especially — Garry, I don’t really think you are ‘getting the message’.

That’s Richard Umbers, the CEO of Myer, and the company’s chairman — sorry, chairman-elect — Garry Hounsell.

‘The message’ — as I’ve been trying to explain to them — is very simple: Solomon Lew is not going to go away and he is not going to ‘play nice’.

He’s not going to give the new Myer board and the ‘New Myer Strategy’ some — any — clear air; he is most certainly not going to play Father Christmas (either side of this coming December 25) by making a high-priced offer for Myer.

My — entirely gratuitous — advice to Hounsell and his board colleagues is that they had an undeniable (and unchanging) binary choice: a fight to the death or finding some way to deal with Lew.

The first is a fight to the death they cannot win. Are they beginning to get some hint of that in the daily — and mounting — assaults they are receiving from Lew? He probably won’t be able to keep it up daily, but he will keep bashing away.

And as for the second, they can only — perhaps — achieve a deal which is unambiguously in the interests of all shareholders, while they are dealing from the advantage of incumbency.

They are certainly not dealing from a position of strength, either in terms of the register or operational performance.

No, Lew won’t ‘win’ at the AGM. But the board would make a big, a very big, mistake to believe either that it had defeated him or it now had the luxury of time until, say, next year’s AGM.

It would be digging a big hole. Or grave.

The only question would be how quickly Hounsell went from chairman-elect to ex-chairman.