South African $2 billion foreign buyout bid for Australian retail icon David Jones

THIS is Tim Moir, the CEO of South Africa’s Woolworth Holdings Ltd, who has just splashed out $2b on an Aussie icon. And that is a big smile.

AN AUDACIOUS bid from an up-market South African department store company is likely to see David Jones shift into foreign ownership within months.

David Jones’ shareholders have been offered a $2.1 billion deal from Woolworth Holdings Ltd to walk away from the ­famous Australian brand.

Woolworths HL, which is a $5.5 billion company listed on the South African stock exchange, said if the takeover was successful it would ramp up the offering of David Jones-branded products, focus heavily on selling online and employ more people with a better product knowledge in store.

All eyes will be on David Jones CEO Paul Zahra to see if he is retained in the job.

Woolworths HL chief executive Ian Moir said the company projected, under its ownership, another $130 million a year in value would be injected into David Jones by 2019.

WHL would be a silent brand in the market while the David Jones brand would be ramped up and used on a vast range of clothing and other products.

“DJs is one of the most loved, most ­aspiration brands in the country,” Mr Moir said, adding the two companies were a “perfect match”.

Mr Moir stopped short of confirming if Paul Zahra would remain chief executive.

“We don’t own the business yet. When we do, he will be the first we speak to,” Mr Moir said.

Mr Moir promised a more interesting and exciting in-store experience at David Jones and said customer data collection through credit and membership cards and social media marketing would be key tools in the growth strategy.

The David Jones board, led by new chairman Gordon Cairns for just four weeks, has unanimously backed the offer, telling shareholders they should sell to Woolworths HL for $4 per share.

David Jones chairman said the move was ‘enormously positive’ for staff.

“For shareholders, customers and staff: I think it’s enormously positive for all of them,” Mr Cairns told The Daily Telegraph last night.

The offer price of $4 is 25 per cent more than the closing price on Tuesday, before the offer became public, and is a healthy 39 per cent more than the price at the last day of trade in January, before news broke that Myer had proposed a merger with DJs.

Should the offer pass the Foreign ­Investment Review Board’s tests, DJs would no longer be a public company ­listed on the Australian Stock Exchange

Mr Moir acknowledged DJs was an “emotional Australian icon” and pledged “DJs customers will not be disappointed by what we do”.

Myer announced yesterday it had withdrawn its merger offer with DJs. Should this takeover go ahead Myer faces a cashed up and fierce competitor.

WHL already owns Country Road, Witchery and Mimco and Mr Moir said that all those stand-alone stores would remain open.

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