Country Road falls into South African hands

SOUTH African retailer Woolworths Holdings has taken full control of fashion chain Country Road, 17 years after its first takeover attempt stalled at just under 88 per cent.

Woolworths Holdings yesterday declared it had completed the compulsory acquisition of all remaining Country Road shares after retail billionaire Solomon Lew finally agreed in July to sell his 11.9 per cent stake in the company, which he had used to block the takeover since 1997.

Woolworths made a renewed takeover offer for Country Road this year in order to secure the support of Mr Lew for a $2.15 billion takeover of David Jones, after Mr Lew bought a 9.9 per cent stake in DJs and threatened to also block a shareholder vote on that deal.

Mr Lew had earlier proposed teaming up with Woolworths in a joint-venture takeover of DJs, or buying them out of Country Road, but was rebuffed on both accounts — prompting his strategic acquisition of the retailer’s shares.

In order to persuade him to allow the DJs deal to go ahead, Woolworths launched a takeover bid for Country Road at $17 a share — conditional on the DJs bid proceeding. While no agreement was ever negotiated or agreed, Mr Lew abstained from voting his shares at the DJs shareholder meeting, at which other shareholders voted overwhelmingly in favour of the deal.

Woolworths chief Ian Moir previously said Country Road’s brands would form a major plank of his plans to increase the level of in-house brands stocked at DJs, as part of a plan to increase profits by $130 million a year.

He has also said that the combination of DJs, Country Road and Woolworths Holdings — which has no connection to Australian retailer Woolworths Ltd — would create a market-leading southern hemisphere retailer that can withstand competition from US and European competitors.