Woolworths Holdings Ltd is to acquire the Australia-based fashion retailer Country Road Ltd by appealing to minority investors, including billionaire Solomon Lew, to sell their shares for 17 Australian dollars apiece. The news comes at a time when the company has been planning the takeover of David Jones Ltd for about 2.2 billion Australian dollars (2 billion dollars).
According to a regulatory statement made by the South African company, the company is to pay 17 Australian dollars apiece in order to take control of Mr. Solomon Lews and other minority shareholders stakes in Country Road. Mr Solomon Lew is to receive a total of 209 million Australian dollars (197 million US dollars) for his 11.95 stake in Country Road. The deal is said to be finalized only in case shareholders of David Jones Ltd support the separate 2-billion-dollar offer of Woolworths.
Earlier, the South African company has made an offer that amounts to 4.00 Australian dollars for each of the David Jones shares.
Woolworths has said that purchasing Country Road would be the “logical next step” after taking control of David Jones due to the fact that the two businesses in question are to provide it with various possibilities. If the deals are to be sealed, this is considered to create one of the biggest retailers in the southern hemisphere, which on the other hand would provide Woolworths with the opportunity for seeking expansion beyond its home market, which is currently facing slowing growth.
As reported by the Financial Times, the Chief Executive Officer of Woolworths Holdings Ltd – Mr. Ian Moir said: “In light of the proposed acquisition of David Jones, this is a common sense and timely opportunity to seek to reach full ownership of Country Road.”
Woolworths already holds almost 88% of Country Roads stock and is now focused on taking full control of the company, by offering to buy the rest of the shares.
Lauren Thompson, who is a spokeswoman of the Australian billionaire Mr. Solomon Lew refused to make any comments on the situation.
Woolworths Holdings Ltd was 0.76% up to close at 7,841 South African rand per share yesterday, marking a one-year change of +30.44%. According to the information published on the Financial Times, the 12 analysts offering 12-month price targets for Woolworths Holdings Ltd have a median target of 8,600, with a high estimate of 9,500 and a low estimate of 6,900. The median estimate represents a 9.68% increase from the last price of 7,841.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
