Billionaire businessman Solomon Lew surprises again with his raid on David Jones

A DESCRIPTION of billionaire businessman Solomon Lew from a long-time confidant, former competition commission tsar Graeme Samuel, sheds some light on why Woolworths knows it has a fight on its hands.

Solomon Lew, chairman of Premier Investments.

“HE returns trust and loyalty in equal measure but if you betray him then that is also returned.”

This description of billionaire businessman Solomon Lew from a long-time confidant, former competition commission tsar Graeme Samuel, sheds some light on why David Jones raider Woolworths knows it has a fight on its hands.

The corporate community is divided over what is driving Lew in his shock move to buy up David Jones shares just as South Africa’s Woolworths is planning a $2.2 billion takeover.

But all agree the rag trader’s calling card is value.

While penthouse apartments, flashy cars and yachts are all among Lew’s playthings, it is that ability to find value where others fail that has seen him rise from the dodgy wholesale fashion operations of Flinders Lane during the 1960s to the prestigious top floor office at 101 Collins Street.

“Plenty of people underestimate Solly at their own expense,’’ another close friend said.

And this latest play certainly seems to be a serious one.

The Collins St epicentre of his empire has been a hive of activity in recent weeks, lawyers and brokers traipsing in and out as Lew put the final touches on his audacious DJs share plunge.

Lew’s is the classic rags to riches story, albeit with a number of bumps and screaming headlines along the way.

For more than two decades, the retail magnate has dominated Melbourne’s business scene, driven by a desire to achieve and an unfaltering belief in his and his small team of advisers’ ability.

Only once has Lew moved away from his life’s passion — retail — in a brief foray, along with trucking tycoon and close mate Lindsay Fox, to try to rescue Ansett. But the duo eventually gave up.

Walking the shop floors and striking bargains, aided by a gilt-edged Rolodex of contacts across the worlds of politics and business, are part of Lew’s DNA.

The 69-year old is one of Melbourne’s true movers and shakers and this has made him friends and enemies in equal measure.

And the decision to deal himself into the biggest game in town is a classic Lew play.

So what do corporate figures and market analysts believe the exact game plan is?

Some believe Lew wants to hold South African raider Woolworths — which has no relationship with its Australian namesake — to ransom, forcing it to buy out his stake in their joint-investment Country Road by threatening to scupper the DJs takeover otherwise.

Others say Lew is seeking a series of deals on existing DJs brands and possibly even an option on some of the department store’s blue-chip property portfolio.

And there is a growing band wondering if Lew is simply hoping to drive up the offer of $4 per DJs share from Woolworths.

Lew’s move to snap up over $200 million of shares in David Jones over the last month clearly has rattled Woolworths. It has already postponed a planned shareholder vote on the takeover.

Late on Thursday, Woolworths demanded an extra two weeks, until July 14, to rework its strategy and ensure its has enough support to counter Lew.

Acquiring DJs is a key part of Woolworths’ planned global expansion. It wants to leverage the association with models such as Jessica Gomes to drive the group’s brand internationally.

Lew is happy to play the long game.

He has been holding an 11.8 per cent stake in Country Road since he lost a takeover battle to the South African firm almost 17 years ago, and has been a major pain over most of the journey, constantly questioning and attacking the management and board.

The duo have almost total ownership of the brand, but despite numerous attempts to buy him out, Lew hasn’t budged because he didn’t believe the price was right.

But now the time is right. Country Road stock is at almost $14 a share after languishing at around $3-$4 for most of the last decade, and Woolworths is desperate to acquire DJs.

So why is it so hard to predict his next move?

Lew’s camp is tight-lipped.

Some rivals describe him as willing to push the envelope in the pursuit of a few extra dollars. Others swear by his loyalty and business acumen.

While his contacts list is huge, his small band of friends include a powerful inner circle — high-flyers such as Fox, Samuel, and corporate powerbroker Gary Weiss.

The former Coles Myer chairman is seen by many in the business community as a master tactician.

The crown jewel of his operations is Premier Investments, which controls fashions brands Just Jeans, Jay Jays, Portmans and Dotti.

His prized Bentley can regularly be seen ferrying him between the back door of 101 Collins and his luxury $13 million apartment in the Royal Domain Tower — often via some of the city’s best eateries.

Lew has two super yachts — the biggest the 54-metre Maridome — which can regularly be spotted around Docklands or Portsea during the summer before it heads to Europe or Florida for the northern hemisphere summer.

But despite all the wealth Lew also regards himself as an anti-establishment type and has often taken positions contrary to accepted wisdom on deals and issues — which have landed him huge paydays.

Samuel, the former Australian Consumer and Competition Commission boss and a long-time friend of Lew’s, believes the DJs purchase is all about value, not revenge.

“He has always been a value investor, whether it is a deal for Country Road or he thinks the price for David Jones could be higher. He will be patient and let things take their course,” Mr Samuel told the Herald Sun from Norway, where he is on holiday.

“Sol often sees opportunities that others don’t, and with former DJs boss Mark McInnes at his side, maybe he thinks there is more value in the store than Woolworths has offered.

“Sol is a very loyal friend and supporter, through thick and thin. Loyalty is terribly important to him,’’ he says.

“He is not driven by revenge. That is a destructive emotion, it is irrational, and doesn’t lead to good outcomes. Sol is always a value investor, and he has demonstrated that time and time again over the years.”

Another senior corporate figure with more than 20 years’ experience dealing with Lew was not so sure.

“It is typical Sol. He has seen an opportunity for both payback and to make a dollar,” he said.

Lew has been a central figure in most of the major retail deals over the past 30 years.

It was the decision to buy a stake in Myer at cheap prices in the early 1980s, however, that was the making of the man.

Myer chief executive Bernie Brookes, who has moved in the same circles as Lew for decades, described the retailer as having made a sizeable contribution to the Australian retail environment.

“Solomon Lew has a wealth of experience, a strong understanding of international retail, and is well connected and respected on the world stage,” Mr Brookes said.

It was this stake in Coles Myer, which he later sold to Wesfarmers just ahead of the global financial crisis, that turned Lew from a multi-millionaire to a big-time billionaire.

Now it seems he is back for more. Whatever happens, most corporate watchers expect him to walk away a winner.

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