Jul 21, 2014
Woolworths' bid for Country Road deemed fair
Jul 21, 2014
SYDNEY, Australia - South Africa's Woolworths' $200 million bid to buy out Australian retailer Country Road shareholders was fair and reasonable, an independent expert said on Monday.
Woolworths welcomed the findings, which will help ease any shareholder concerns that it paid too much for the Country Road stake in order to remove a potential obstacle to its bid to take over Australian department store chain David Jones.
Last month, Woolworths offered to buy the near 12 percent stake in Country Road held by billionaire Solomon Lew, on the condition that its separate A$2.2 billion ($2.07 billion) bid for David Jones went through.
Lew had amassed a holding of just under 10 percent of David Jones and the Country Road offer was seen as an attempt to secure the David Jones deal, which was agreed by shareholders earlier this month.
Independent expert Lonergan Edwards and Associates said it valued Country Road at A$14.92 to A$16.22 per share, compared with the A$17 per share bid from Woolworths.
Not included in the valuation were benefits unique to Woolworths from buying out Country Road through the ability to grow the business faster and increased certainty about savings benefits, the expert said.
An Australian-based spokesman for Woolworths said Country Road and Woolworths shareholders could be happy with the deal.
"The offer is fairly priced from the perspective of both Country Road and Woolworths shareholders, reflecting the unique benefits that only Woolworths can derive from having 100 percent of Country Road as well as David Jones," he said in an emailed statement.
$1 = 1.0653 Australian Dollars
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