Lew responds to allusions to a capital increase at Myer

The fight for control of the board of directors of the Myer department store will be decided in the coming months, with the company’s AGM set to take place in late October, but Solomon Lew’s major stake in the company may well be diluted by the time. of the vote.

According to multiple media outlets over the past week, Myer has been approached by investors looking to buy out his online business and loyalty program, which the department store could use to raise capital and issue more shares – a move that could put Lew on the back. when it’s time to vote on a new board.

Myer said the media speculation was “absurd” and that he had no plans to issue any shares immediately, but Lew, through Premier Investments legal counsel Jeremy Leibler, stated that Premier will take “all measures in its power to prevent any attempt to dilute and disempower” its stake in the company.

“Premier is amazed that Myer and his board are wasting the company’s resources looking for ways to dilute Premier instead of fixing Myer’s chronic and prolonged underperformance,” Leibler wrote in a letter to the legal representative. by Myer, Rory Moriarty at Clayton Ulz.

“[And] can only interpret Myer’s moves to request a capital increase as Myer’s attempt in bad faith to stifle Premier’s plea for changes to Myer’s board of directors.

According to Leibler, a capital increase in the form of articles in the AFR and SMH and that Myer rejects will occur, would constitute a breach of the duty of every director of Myer to act in good faith and constitute “oppressive conduct”.

Lew has publicly stated that he is not interested in a full board takeover of the department store, although the letter says Premier reserves the right to make a request to the takeover panel or request orders. judicial proceedings to prevent such a capital increase from occurring.

Department store sales up this year

On Thursday morning, Myer released his unaudited business update – something Lew requested last week – and said he plans to return to “second half” profitability for the first time since FY17.

Total sales for fiscal 21 are expected to reach $ 2.6 million, up 5.5 percent from the same period last year, while online sales are up 27.7 percent for one hundred to $ 539 million.

Total net income is expected to be between $ 47 million and $ 50 million for the year, compared to Myer’s disastrous FY20 result of a net loss of $ 13.4 million.

“Our customer-centric strategy continues to gain momentum, generating significantly improved net income for the full year, despite the continued impacts of Covid in fiscal 21,” said the director General John King.

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