Solomon Lew quarantines Premier CEO Richard Murray in battle for Myer control

Solomon Lew will quarantine the incoming chief executive of his Premier Investments empire, Richard Murray, from direct dealings with Myer.

Premier Investments chair Solomon Lew with his incoming chief executive Richard Murray. Picture: Aaron Francis

Solomon Lew will quarantine the incoming chief executive of his Premier Investments empire, current JB Hi-Fi boss Richard Murray, from direct dealings with department store Myer as the billionaire prepares to sweep out the board and take greater control of the struggling chain.

The Premier Investments board believes Mr Murray needs to learn about the capricious world of fashion and Mr Lew wants his new CEO to not be distracted by fresh hostilities with Myer and a looming battle for control of the 120-year-old store.

Should Mr Lew gain control, any investment decisions would not involve Mr Murray, who will be kept busy with the Premier Investments fashion brands.

The unexpected decision by a major Myer shareholder two weeks ago to offer its 5 per cent stake in the department store to Mr Lew gave him the opportunity to tighten his hold on the share register and sped up Premier Investments’ timetable.

When Mr Murray starts as CEO in October, taking over from Mark McInnes, he will walk into the middle of a proxy war and very public Myer assault.

Mr Murray, who spent 20 years at JB Hi-Fi, was unveiled as the new CEO in April. At the time Premier Investments’ stake in Myer had been stuck at just over 10 per cent since 2017.

Premier now has 15.77 per cent and has intensified its siege of the embattled retailer’s board.

Mr Lew, who is chair of Premier and holds 42.43 per cent, is now agitating for the final non-executive Myer directors to quit and is pressing for a wider shareholder revolt.

Myer could hand over a copy of its share register to Premier as early as this week.

This could bring on an extraordinary general meeting at which Mr Lew could try to kick out the board, but this would also trigger concerns about perceived conflicts of interest surrounding the billionaire businessman. Mr Lew and his stable of family companies are the single biggest suppliers to Myer outside of cosmetics, an many of his fashion brands compete with Myer.

The mood within the Premier board is that while conflicts of interest may occur they should not preclude it from gaining board seats at Myer and the conflicts can be managed.

Meanwhile, The Australian can reveal that the Myer board in 2017 was advised by external legal counsel that the conflicts of interest that plagued Mr Lew’s public company and family owned businesses were so broad that it would be difficult and probably unworkable for him to have his nominees on the Myer board.

Myer’s law firm argued that even identifying the conflicts would be complex and problematic, as the ranged from fashion and merchandise buying to pricing and property, further complicating the Myer board’s deliberations.

The lawyers said Myer could object to Mr Lew and Premier demanding board seats even though he held 10 per cent of the stock or more.

Myer directors at the time were concerned about one of Mr Lew’s hand-picked nominees for the board, former UBS banker and 12-year Premier director Tim Antonie, who was seen as too close to Mr Lew.

The view of the Myer board towards the nominees Mr Lew put forward in 2017, including Mr Antonie and former Grace Bros managing director and Premier director Terrence McCartney, was “the closer they are to Lew the harder it is”.

Mr Lew is currently demanding that Myer’s three directors, JoAnne Stephenson, David Whittle and Jacquie Naylor, resign or be thrown out by shareholders.

Mr Lew is yet to unveil the nominees the would seek to put on the Myer board.

The key debate within Mr Lew’s war room is whether to call the EGM for September or wait for Myer’s AGM in November where he could eject the board.

A spokesman for Mr Lew declined to comment.

When Premier moved to 15.77 per cent of Myer this month, acting chair Ms Stephenson extended an olive branch, offering board representation, following years of bitter conflict with the billionaire.

Mr Lew’s response was direct and crushed any hopes of peace talks: “Premier has nothing to gain from spending time with the members of the current Myer board,” he said.