By Craig Zammit and James Wells
MELBOURNE: With a bid of $900 million, a consortium including the Myer family and Newbridge Capital appears set to buy back the 61-store department store chain.
The $900 million price-tag is understood to be a best-case scenario for Coles Myer, with Newbridge Capital’s bid said to be well above the figure offered by its nearest competitors.
The consortium consists of Newbridge Capital, Texas Pacific Group and the Myer family, of which Myer owns approximately five per cent.
The decision will now ignite discussions between the winning bidder and the various landlords of the 61 Myer stores, including Lend Lease, who are said to have secured the preferred bidder status for the Myer Bourke St location.
While the apparent losing bidders CVC Asia Pacific, Edgars Consolidated and Harvey Norman have not yet released official comment on the matter, it looks as though the only glimmer hope remaining is if negotiations between Newbridge Capital and the current landlords fail.
John Wylie of Coles Myer and adviser Carnegie Wylie will supervise the negotiations, with landlords given veto over new owners and the power to dictate how the stores will run and control rent.
Newbridge Capital has existing ties with Coles Myer, and has teamed up with the Myer family and members of Myer management in the past, including managing director Dawn Robinson.
Top management from the company, including Robertson, have been asked to buy in to the company. This is a normal strategy for private equity companies, who prefer executives to also take some risk.
By granting Newbridge Capital preferred bidder status, Coles Myer has managed to keep the stores in the Myer family, although it is still considered a possibility that some Myer stores may be taken downmarket.
One of the deciding factors not to sell to the South African based Edgars Consortium, may have been the potential for the outfit to downmarket the stores. With Newbridge Capital owning the mid-price family department store Debenhams in the UK, the potential for a downmarket approach is still possible.
Coles Myer is still denying any official decision has been made. It is expected that the official announcement will come pending successful negotiations over the next few weeks.