Myer proposes tie-up with Premier’s Apparel Brands

Under the proposed deal, Myer would acquire Premier’s Apparel Brands including Just Jeans, Jay Jays, Portmans, Jacqui E and Dotti.

Department store giant Myer has proposed a potential tie-up with the Solomon Lew-backed Premier Investments apparel business to “create one of the leading retail and apparel companies across Australia and New Zealand”.

Under the proposed merger announced on Monday morning, Myer would acquire Premier’s Apparel Brands.

Premier would then distribute its current stake in Myer, worth approximately 29 per cent, to its shareholders, leaving its investors with a direct holding in the department store giant.

Brands including Just Jeans, Jay Jays, Portmans, Jacqui E and Dotti form Premier’s Apparel arm, with the division generating $845m in revenue last financial year across 717 stores.

Myer has proposed a merger with Solomon Lew-backed Premier Investments. Picture: NCA NewsWire / Luis Enrique Ascui

In a statement to the ASX, Premier Investments said Myer’s merger proposal warranted further consideration.

“The board’s focus in relation to the proposed transaction will be assessing the potential benefits for Premier shareholders, whilst maintaining the integrity and growth initiatives of its Apparel Brands business,” the statement said.

“Accordingly, Premier and Myer have agreed to conduct reciprocal due diligence and discuss potential transaction terms.”

Premier Investments is currently working towards a separate demerger of stationery business Smiggle, and also is exploring the possibility of offloading pyjama store Peter Alexander.

Myer executive chair Olivia Wirth said the mooted acquisition was the result of a strategic review of the department store business.

Myer says the move is part of its strategy to create value for shareholders. Picture: NCA NewsWire / Damian Shaw

“While Myer has one of Australia’s strongest retail brands, store networks and loyalty programs, there is a significant opportunity to reinvest in our product offering, customer engagement capabilities and further optimise our supply chain to achieve our full potential,” Ms Wirth said.

“As part of this review, Myer is exploring both organic and inorganic investment opportunities that align with our strategic focus areas to create value for Myer shareholders.

“It quickly became clear that the idea of a combination of Myer and Apparel Brands offered significant potential synergies and prospects for growth, evidently warranting further examination.”

Advising on the deal are Barrenjoey Capital and Clayton Utz for Myer, andUBS and Arnold Bloch Liebler for Premier.