Solomon Lew puts Myer board in crosshairs

Solomon Lew could be back in control of Myer by June, following 16 years in the wilderness.

Premier Investments chairman Solomon Lew and chief executive Mark McInnes. Picture: David Geraghty

Solomon Lew could be back in control of Myer by June, following 16 years in the wilderness triggered by his exile from the old Coles Myer board, after renewing his attack on the department store owner and declaring he will call a shareholders’ meeting to clean out the entire Myer board.

Having been thwarted at Myer’s annual general meeting in November, where he secured the symbolic victory of generating a “first strike” against the board on its remuneration report but failed to kick out targeted directors, the billionaire has stepped up his campaign to replace all directors.

Mr Lew’s Premier Investments yesterday kickstarted its battle by demanding another current copy of the Myer shareholder register as prepares for an extraordinary general meeting to tip out all directors and appoint its own three directors to rescue the ailing department store.

But in a bid to attract other major investors to his banner, Mr Lew revealed that over coming weeks he and Premier would “caucus with other Myer shareholders” to determine independent candidates for the new Myer board to be put to all shareholders at the proposed EGM.

These candidates would join with those nominated by Mr Lew last year: former Myer Grace Bros managing director Terry McCartney, former banker Tim Antonie and veteran property executive Stephen Sewell.

WEB Business Myer share graph

Mr McCartney and Mr Antonie sit on the Premier board and were a cause of some discomfort for other shareholders and proxy advisers, who saw this as enabling Premier to obtain too much power on the Myer board without paying a takeover premium.

An EGM could be held 45 business days after it is formally requisitioned, although Premier is believed to have set aside at least the next month to contact other major Myer shareholders to choose director candidates. This could push out an EGM to June.

Premier is Myer’s biggest shareholder with a stake of 10.77 per cent and it will need the support of Investors Mutual boss Anton Tagliaferro, whose fund holds about 10 per cent. It was Mr Tagliaferro’s refusal to support Mr Lew at Myer’s AGM in November that sank his scheme to kick out three directors, including new chairman Garry Hounsell.

Victory this time would mark a return to Myer for Mr Lew, who was ejected from the Coles Myer board in 2002 following a bitter proxy war.

Mr Lew spent much of last year fighting a public war with Myer and its directors. Myer’s shock profit downgrade in December and concerns it would have to write down a large chunk of its $1 billion in intangible assets strengthens his position.

“Myer’s sales and profit downgrade announcement during December 2017 demonstrated a continued disappointing downward trajectory,’’ Premier said yesterday. “It is clear, consistent with widespread market expectations, that Myer will need to write down significant amounts of intangibles on its balance sheet at, or before, the upcoming interim results announcement.

“Premier strongly believes that a new Myer board with relevant expertise and experience in retail, property and business is required as a matter of urgency. It is not in the best interests of shareholders that the current Myer board be allowed to preside over another year of declining sales, eroding profits and further share price deterioration before urgently needed change is introduced at board level.

“Rather than allow another year of decline and value-destruction under the current Myer board, Premier is working towards an EGM that will allow Myer shareholders to have their say and provide them with an opportunity to reconstitute the entire Myer board with an experienced and performance focused board capable of addressing the current challenges and fulfilling the potential of the Myer brand and business.”