Solomon Lew resumes hostilities against Myer

Solomon Lew will call an extraordinary general meeting to try to tip out Myer’s entire board and appoint his own directors.

Myer chair Garry Hounsell and CEO Richard Umbers at last year’s AGM. Pic: AAP

Retail billionaire Solomon Lew has renewed his campaign against Myer by demanding another, current copy of its shareholder register, and will call an extraordinary general meeting to try tip out the entire board and appoint his own directors to the ailing department store.

Hostilities raged between Mr Lew and the nation’s largest department store (MYR) last year as the two camps traded barbs, accusations and legal threats in a public brawl that became increasingly bitter.

Premier Investments (PMV), which is controlled by Mr Lew and is Myer’s biggest shareholder with a stake of 10.77 per cent, says it is prepared to fund all reasonable costs of a proposed EGM in the interests of all shareholders.

The EGM could be held as soon as March and sets the scene for weeks of public squabbling between Mr Lew and his target, the Myer board.

In a statement today, Premier said it had previously advised the market that it has reserved its rights to call an EGM of Myer shareholders, especially after Myer earned a “first strike” against its remuneration report at the AGM late last year.

“At Myer’s 2017 AGM there was a significant protest vote against the board of Myer, resulting in a first strike on the remuneration report,” Premier said.

“In the context of Myer’s current performance, it is likely that Myer’s 2018 AGM will see a second strike against the Myer board and, consequentially, a spill of the entire board.”

At the AGM in November Mr Lew and his Premier group led a protest among shareholders over Myer’s poor trading results and collapsing share price. It resulted in a 29.3 per cent “no” vote against the company’s remuneration report.

Premier’s Solomon Lew, right, and CEO Mark McInnes. Pic: David Geraghty.

Only three weeks later Myer shocked the market with a profit downgrade as sales in December slumped. There is also growing concern Myer will need to book significant impairments and writedowns to the near $1 billion of intangible assets on its books, which could threaten its banking covenants.

“Myer’s sales and profit downgrade announcement during December 2017 demonstrated a continued disappointing downward trajectory,’’ Premier said today.

“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.

“It should now be abundantly clear to all stakeholders in the company that a significant circuit-breaker is needed for the company to have any sustainable future.

“Myer shareholders, staff, suppliers, landlords and customers deserve a strong and experienced board to lead the business through the current significant challenges it faces.”

Premier said today it has requested a current copy of the Myer shareholder register to facilitate engagement with Myer shareholders regarding an EGM to reconstitute the incumbent, “failed” board.

In the lead-up to the battle at the Myer AGM last year Premier put forward three directors to represent it on a new Myer board — former Myer Grace Bros managing director Terry McCartney, former banker Tim Antonie and property guru Stephen Sewell. Mr McCartney and Mr Antonie sit on the Premier board.

Premier said it will over the coming weeks caucus with other Myer shareholders to determine appropriate independent candidates for the remainder of the new Myer board to be put to all shareholders for voting at the proposed EGM.

“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.”