Myer launches proposed merger with Premier Investments’ fashion business

Australian retailer Myer Holdings (ASX: MYR) has approached Premier Investments (ASX: PMV) to explore the potential acquisition of its Apparel Brands business.

The proposed deal – part of Myer’s ongoing strategic review to increase profitability and drive sustainable earnings growth – would see Myer’s exclusive brands portfolio combine with labels including Just Jeans, Jay Jays, Portmans, Dotti and Jacqui E.

Apparel Brands has a retail network of 717 stores across Australia and New Zealand and generated revenues of $845 million in the 2023 financial year.

New share issue

Under the terms of the proposal, Myer would acquire Apparel Brands in exchange for the issue of new Myer shares to Premier.

Should the deal proceed, Premier’s largest shareholder Century Plaza Investments would become Myer’s largest shareholder.

Premier chair Solomon Lew would join the board of Myer as a non-executive director and has indicated he would be prepared to take an active role if the transaction goes ahead.

Myer, which has confirmed it would retain ownership of the sass & bide, Marcs and David Lawrence brands, has appointed Barrenjoey Capital Partners as financial adviser and Clayton Utz as legal adviser to the acquisition.

Strategic review

Myer executive chair Olivia Wirth said the Apparel Brands proposal followed a “thorough review” of Myer’s strategic direction and growth opportunities, focused on increasing profitability and improving returns.

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

“It quickly became clear from our review that the combination of Myer and Apparel Brands could offer significant potential synergies and prospects for growth and warrants further examination.”

An independent board committee led by Ms Wirth and including all of Myer’s non-executive directors has been formed to consider the acquisition.

Strong synergies

Premier believes the deal could be a “meaningful opportunity” for both businesses.

“The proposed combination has the potential to deliver a step change in Myer’s scale and market position, deliver synergies and drive sustainable earnings growth,” the company said.

“Our shareholders would also benefit given Premier’s existing shareholding in Myer.”

Premier’s board has determined the proposal warrants further consideration concerning assessing potential shareholder benefits.

The company has appointed UBS Securities Australia Limited as financial adviser and Arnold Bloch Leibler as legal adviser during the assessment period.