David Jones shareholders thumbs up

Woolies news, David Jones' shareholders have voted overwhelmingly for the South African company to buy them out, check out the release from down under: David Jones Shareholders Vote in Favour of Scheme of Arrangement. 96.81% percent of the shares in issue voted in favour of the deal, but only 89.64% percent of the holders voted in favour. Meaning that whilst the people that had most of the shares voted in favour, many private individuals probably thought this was a bad idea.


OK, so what next for Woolworths? What are they waiting for? Well it looks like the money flows on the 1st of August, out of Woolies and into the hands of the David Jones shareholders. At 4 Dollars a share that amounts to 2.149 billion Aussie Dollars, at the current exchange rate that amounts to 21.67 billion Rand. That represents 31.95 percent of the closing market capitalisation of Woolworths on Friday. I get the sense that the market is warming to the deal, believing that the execution of the current management team is stronger than most businesses down under. Most businesses have not owned what is a successful Australian retile operation for nearly two decades, in the form of Country Road.


Remember that in order to shunt through this deal, Woolies had to buy out Solomon Lew, who had bought Country Road (and held it for 17 odd years) at 2 Aussie Dollars, he exited now at 17 Dollars a share, a good return in a developed market for a retail stock. Good for Lew, he got what he wanted in the end, good for Woolworths too, they get all of Country Road.

That part is not done and dusted. The Sydney Morning Herald reports David Jones' fate hangs in the balance as Lew mulls takeover deal. The important part in there is that the Australian Securities and Investments Commission believe that in Australian Law, Woolworths have breached "equality of opportunity", obviously in favour of Lew. That is another 213 million Aussie, or 2.15 billion Rand for Lew, but that is presuming that the court hearings this Thursday are in Woolworths favour. The Australian Securities and Investments Commission, according to the SMH article may raise all sorts of objections.


One step at a time then, Thursday will be key and we will know by the early morning, as a result of the time zones.