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David Jones opens book on Myer merge

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Retailer David Jones will undertake a thorough assessment of a merger proposal put by rival Myer.

David Jones on Tuesday said it has appointed consultants to help it review the proposal, including any benefits for the two retailers.

The review will also assess the benefits of David Jones proceeding on a stand-alone basis.

Nonetheless, the latest statement from David Jones represents a significant shift for the company after it stated last year there would be no fair value to its shareholders in merging with Myer.

David Jones on Tuesday said that, given the Myer proposal was based on a share swap, and if talks between the two companies proceeded, an assessment would be made of Myer’s business, requiring Myer’s co-operation.

David Jones chairman Gordon Cairns said it was imperative that his company undertook this initial strategic work prior to talks with Myer.

“It will enable us to have a full understanding of the value that can be delivered to our shareholders if David Jones were to merge with Myer, versus the value that can reasonably be expected to be delivered to our shareholders if the company continues with its Future Strategic Direction Plan on a stand-alone basis,” Cairns said.

“Once this work is completed, we will be in a position to engage in a meaningful way with Myer.”

The latest developments in the proposed merger follow David Jones chief executive Paul Zahra reversing his decision to quit the company, and Myer chief executive Bernie Brookes’ re-appointment to his job.

It also follows the resignation of David Jones chairman Peter Mason and the resignation of directors Steve Vamos and Leigh Clapham over controversial share purchases by the latter two.

In Tuesday’s announcement, Clapham said it had been a privilege to work with David Jones.

“I believe that I have acted in the best interests of the company at all times and it is clearly the right time for me to step down and wish the company well in the implementation of its Future Strategic Direction Plan,” he said.

At 10am David Jones shares were up two cents at $3.31 while Myer shares were up three cents at $2.69.

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