Lew coy about his intentions

All quiet: Solomon Lew is yet to reveal his intentions with his Country Road stake.After a 17-year stand-off at Country Road, retail veteran Solomon Lew is in no hurry to do a deal with South African retailer Woolworths, even after being offered $209 million to sell his stake.

Woolworths, David Jones and their advisers have yet to hear whether Mr Lew intends to accept Woolworths’ $17-a-share offer for his 11.8 per cent stake in Country Road and vote his 9.9 per cent interest in David Jones in favour of Woolworths’ $2.2 billion acquisition.

“We haven’t heard anything, but we weren’t expecting to,” said one source involved in the deals, which promise to create the second largest retailer in the southern hemisphere – as long as Mr Lew plays ball.

Woolworths has launched a $213 million bid to mop up the shares in Country Road it does not own – including the 11.8 per cent stake owned by Mr Lew’s Australian Retail Investments – in the hope of securing Mr Lew’s support for the David Jones acquisition.

Mr Lew emerged with almost 10 per cent of David Jones last week and is believed to have threatened to stand in the way of the scheme unless Woolworths bought him out of Country Road at a massive premium. At $17 a share, the offer is almost four times Country Road’s share value in January and nine times the price paid by Lew for his 11.8 per cent stake in 1997 and 1998.

“It’s a very full price, as the David Jones bid is a very full price,” said Country Road’s third largest shareholder, stockbroker Nestor Hinzack, who owns about 400,000 shares. But Mr Hinzack said he would not be surprised if Mr Lew squeezed another dollar out of Woolworths before agreeing to accept the offer.

“We have a willing buyer at $17 – whether we have a willing seller at $17 remains to be seen,” Mr Hinzack told Fairfax Media. “I’m reasonably confident at this stage that both deals will go ahead,” he said.

Country Road shares rose another 16¢ to $16.56 – compared with $4.83 in January – while David Jones shares were unchanged at $3.94. Shares in Myer, which could become Mr Lew’s next target, rose 2¢ to $2.06. Mr Lew’s advisers declined to comment on his intentions.

If Mr Lew stays true to form, Woolworths may not learn his plans until David Jones’ shareholder meeting on July 14, when Mr Lew will be required to vote his shares.

Woolworths plans to issue a bidder’s statement for Country Road in the next week or two. After the statement has been sent to Country Road’s 180-odd shareholders, Country Road’s directors have 15 days to despatch a target statement.

The offer values the mid-market retailer at $1.78 billion and represents a multiple of more than 30 times 2013 historical earnings per share.