Sydney, Australia (4E) – South African retail chain Woolworths Holdings Ltd. moves to takeover David Jones Ltd. that values the business at 2.15bn Australian dollars ($2bn).
Australia’s biggest department store by market value said its board is recommending the 4 Australian dollar per share offer by Woolworths to shareholders, which represents a premium of 25 percent to David Jones’s closing price of 3.19 Australian dollars on Tuesday.
David Jones, which was founded in 1838, claims to be the world’s oldest department store and still trades under its original name.
The deal will create one of the biggest department store firms in the southern hemisphere.
Like other retailers in Australia, David Jones has been trying to grapple with weak consumer confidence and intensifying competition from foreign online retailers that have lured Australian shoppers while the Australian dollar strengthened.
Overseas companies like Abercrombie & Fitch Co., Inditex SA’s Zara, and Hennes & Mauritz AB have all opened stores in recent years and have provided competition against Australia’s apparel and retail store companies.
The transaction is Australia’s biggest takeover for a retail firm since Wesfarmers Ltd. acquired Coles Group Ltd. in 2007, according to Bloomberg News data.