Myer / David Jones Merger Rumours Ignited and Quashed…Again

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By Published On: April 9, 20180 Comments

Myer shares spiked last week after reports emerged (yet again) of a potential David Jones buy-out. But what will happen to the share price now that DJs' parent company, Woolworths Holdings, has said outright that they are not considering an acquisition?

Late last week, rumours resurfaced that David Jones was considering acquiring rival department store Myer. Market sources apparently revealed to The Australian that Woolworths Holdings, David Jones’ parent company, was considering the acquisition on its current market value of approximately $300 million. As a result, Myer’s share price shot up 8.7 percent on Friday.

“These rumours have no basis,” a spokesman for Woolworths Holdings told AFR Weekend. “We are not considering an acquisition of Myer and there have been no discussions regarding an acquisition with advisers or between the two companies.”

This is not the first time reports of this nature have surfaced (over many years) yet David Jones has repeatedly denied that this is something the company is looking at.

Myer is facing challenges (to say the least) at present. Earlier this year, chief executive officer and managing director, Richard Umbers, stepped down from his role amid continued underperformance and leadership concerns. For its first half — the six months to January 27 — Myer suffered a net loss of $476.2 million. But Woolworths Holdings is facing challenges of its own, recently revealing a 38 percent profit drop in the December half.

Myer is actively looking for a new Managing Director and CEO and has denied that voluntary administration is an option at this point. It has not commented on any potential mergers or acquisitions.

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Heather Bone