Solomon Lew a ‘positive voice’ for Myer, says No 2 shareholder Wilson Asset Management

Myer’s second-biggest shareholder, Wilson Asset Management, says Solomon Lew is one of Australia’s best retailers and his expertise can help lift Myer’s fortunes.

Solomon Lew is marshalling the support of other Myer investors to spill the department store’s board.

Myer’s second-biggest shareholder, Geoff Wilson’s eponymous Wilson Asset Manage­ment, believes Solomon Lew lifting his stake in the department store and his determination to reignite value is a positive, branding the billionaire “one of the best retailers in the country – if not the best ”.

On Friday, Mr Lew sent his lawyers, Arnold Bloch Leibler, into Myer to access the company’s shareholder registers to marshal support to sack the entire board of the department store chain.

He has been agitating for a boardroom revolution for the past two years and this week declared he was now in a position to seek such change after he increased his stake in Myer to 15.77 per cent, via his Premier ­Investments.

But Myer has bridled at Mr Lew’s request to access its shareholder register.

“We do not believe it is in shareholders’ best interests to allow Premier Investments to take or exert control of Myer without shareholders realising an appropriate premium and appropriate value for this effective change of control,” it said.

And here’s the rub. Premier secured an 11 per cent stake in Myer, at $1.15 a share, in 2018, becoming the company’s biggest shareholder.

Since that time, Mr Lew says $760m, or 71 per cent, of “shareholder wealth” had been “destroyed”. Earlier this week he bought another 5 per cent of the department store, at 40c a share.

In the same period, Premier Investments’ share price has nearly doubled to $27.

Wilson Asset Management sees Premier – which owns Smiggle, Peter Alexander, Just Jeans and other retail brands – as a positive force to lift the fortunes of Myer. Wilson Asset Management lead portfolio manager Oscar Oberg said WAM supported Myer chief executive John King and the senior management team, but believed the company was worth more than its current share price of about 45c.

“We think John and the senior management team have been doing a good job in a very tough environment. Our view has always been that we want to see stability with the management team in what’s been a very difficult period,” Mr Oberg said.

“Now Solomon Lew and obviously Premier is one of the best retailers in the country, if not the best, and we think they can assist given their experience and expertise in the sector.

“It’s positive that Solomon and Premier see value. And like us, we don’t think it’s worth 45c. We think it’s worth a lot more. So that’s a positive.”

Mr Lew gained the support of WAM, which owns about 7.8 per cent of Myer, to oust former chairman Garry Hounsell, who resigned ahead of last year’s annual meeting when it became clear WAM intended to vote against his re-election.

Mr Lew intends to call an extraordinary meeting to allow shareholders a chance to vote on the composition of Myer’s current board and the department store’s future.

“Premier has commenced consultation with fellow Myer shareholders regarding the quick reconstitution of a majority independent Myer board with the necessary skills and experience. As part of this process, Premier has also retained a leading proxy solicitation firm,” Mr Lew said.

“In Premier’s view, Myer’s three remaining non-executive directors should for once put its shareholders first and resign immediately. Any other action would be futile, and costly for Myer shareholders who have endured enough.”

A Premier spokesman dismissed Myer questioning the level of “consultation” with shareholders.

“It took Premier acquiring another 5 per cent of the company for the acting chair to lift the phone after eight months,” the spokesman said.

“An EGM would allow Myer shareholders to decide for themselves and Premier has been crystal clear that any reconstituted board would be majority independent.

“The recent share price is not down to performance but speculation that positive change is coming.”

Earlier in the week, acting Myer chairman JoAnne Stephenson attempted to extend an olive branch to Mr Lew, offering Premier “appropriate representation” on the company’s board.

But Mr Lew rejected her offer, declaring that Premier had “nothing to gain” from dealing with Myer’s current board.

Ms Stephenson highlighted that Mr Lew had “conflicts” that needed to be resolved before he joined the boardroom. This included Premier’s near 30 per cent stake in home appliances maker Breville, as well as clothing his companies sell to Myer, making it one of the department store’s biggest suppliers outside cosmetics.

But it is understood that those in the Premier camp feel Ms Stephenson’s comments around conflicts of interest are overblown, given Premier’s investment in Breville and other supplier relationships with Myer are widely known, and therefore the necessary actions to recuse itself from procurement discussion and other matters involving the company can be taken.

On Friday, Myer changed tack, with a spokesman saying: “The Myer board is in consultation with its shareholders and will continue to act in the best interests of all shareholders.

“We remain focused on having board matters resolved as soon as possible so that Myer can maintain its focus on business, serving our customers and creating value for all shareholders.”