Just Sell It, Lew Urges Sweetly

The Age

Thursday July 24, 2008

Ari Sharp, Retail Reporter with Vanda Carson

THE Solomon Lew-chaired Premier Investments has sweetened the cash component of its takeover bid for Just Group, and says its latest offer for the fashion retailer is final.

Premier is now offering an extra 15 cash for each Just share, so long as acceptances reach at least 90% of all shares. The bid now offers $2.245 in cash and 0.25 Premier shares for each Just share, valuing the company at $810 million.

Shares in Just shot up 13.1% following news of the increased offer and closed at $3.29, giving the company a market capitalisation of $662 million.

The board of Just has previously rejected the takeover bid, and last night said it was "carefully evaluating" Premier's latest offer. But it noted: "Premier's core offer has not improved and the new conditions that have been introduced mean that there is no certainty that any additional consideration will be payable."

The increased offer signifies Mr Lew's desire to proceed with the bid after earlier this month hinting he might take it off the table following a shock 10%-15% downgrade in Just's earning forecast for the year to July 26.

"We have thought long and hard about making this enhanced offer, particularly in light of the recent performance of Just and the 'surprise' profit downgrade," Mr Lew said.

The retail mogul reiterated his claim that Just, which owns seven fashion brands including Just Jeans, Portmans and Smiggle, needed the expertise that Premier would bring to it to cope during a downturn in retail spending.

"Premier believes Just needs its decades of experience across the retail spectrum to be able to navigate the headwinds facing it," he said. "Premier has the ability to provide Just with substantial cash resources which it can use to fund future acquisitions."

Last month's downgrade was blamed on weak June sales, but Just indicated that sales had improved this month.

"July trading continues to be pleasing, with consumers responding well to new ranges across all brands, and inventory levels remaining well controlled," a company spokesman said.

The offer was further sweetened by Premier offering access to the company's 18 dividend, announced yesterday, for shareholders who accept before August 6, adding another 4.5 for each Just share.

The deadline for access to the dividend, as well as Premier's declaration that the latest offer is its final one, will bring the issue into sharp focus for shareholders, who have so far been reluctant to take up the offer.

Before the increased offer, acceptances had reached just 1.1% in addition to the 23.7% MrLew controlled before the bid. If acceptances had not reached 50% by August 6, Mr Lew said Premier would let the offer lapse.

Mr Lew said he was keen on a swift resolution to the takeover, saying: "We don't want the situation to drag on till Christmas because we might see a further deterioration in the business."

Significant shareholders in Just include AXA, with an 11.8% stake, and Barclays Bank, with 10.6% of the company.

David Paradice, whose investment fund holds about 2% of Just, said he was "positively disposed" to the offer, especially considering the profit downgrade and the slump in consumer confidence.

"Things have changed, the market has changed, consumer sentiment has changed," he said. "It depends on what Solly does with Premier, but it is certainly looking more favourable." -- With VANDA CARSON

15? a share

Solomon Lew's Premier Investments ups its bid for Just Group

13% rise in Just share price

Offer is final and will lapse unless Lew gets at least 50% of Just shares by August 6 SOURCE: PREMIER INVESTMENTS

© 2008 The Age

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