Economy

Meet the investor behind the $1.6 billion takeover bid for David Jones – and find out why it’s got shareholders worried

Engel Schmidl /

The more you learn about John Edgar and his company, EB Private Equity, the more mysterious its $1.6 billion takeover offer for David Jones becomes.

 

With a website that offers no details about the company, and headquarters that are reportedly situated next to a wig shop in Newcastle, England, fears are growing the entire situation may turn out to be an elaborate hoax.

As City Index analyst Peter Esho told SmartCompany this morning, the deal is “quite odd”.

“We’ve said it’s odd, but having said that, I don’t expect the talk to completely diminish. This just got the talking started, and even if this isn’t the most credible bid, there will be many parties running the ruler over various retailers now. It’s in the spotlight now.”

David Jones was contacted for comment this morning, along with Edgar himself, but no replies were available prior to publication.

Last week, David Jones revealed it had received a $1.6 billion offer for the company, and that EB Private Equity and its head, John Edgar, were behind the deal. The company has so far just released a statement saying any talks are at a preliminary stage.

Some initial investigations reveal this entire deal is shrouded in mystery.

The EB Private Equity website itself is bare bones, with only some basic information on the company, which says it is based in Luxembourg and Britain, with a focus on real estate and real estate development.

There are no contact details, nor any details of executives, phone numbers, or even a page listing a portfolio of deals. Edgar is associated with a company called the Luxury Beverage Company, which claims to sell luxury alcohol brands, including one of the most expensive drinks in the world.

Eyebrows have also been raised after details of the website’s designer, Laura Panton, were apparently taken off the EB Private Equity website soon after the takeover became public.

And Edgar hasn’t done much to substantiate the company’s deals, making shareholders reportedly very nervous. He told The Australian that one recent purchase was worth $US70 million, of an office complex in Africa, but so far there doesn’t appear to be anything giving evidence of any other deal.

There are also very few details about Edgar – no LinkedIn profile or any sort of social media account. And yet he seems puzzled by the attention surrounding the bid.

“We didn’t anticipate such a fuss,” he told the publication. “It has come as quite a surprise for us. We are quite taken aback by it. But that’s how the market works.”

“We think our bid is a good bid. It works on a technical and practical level,” he said. “We have put a lot of work into it and would like to engage further.”

The deal would apparently be made up of $850 million in equity, $450 million in borrowings and $450 million of “residual equities for the existing David Jones shareholders”. Fairfax has reported the company has just $200 million under management, and that its headquarters are situated next to a wig and noodle shop in the backstreets of Newcastle.

But Edgar appears to be more interested in David Jones’ property portfolio – and that’s a story that actually makes sense.

According to a Merrill Lynch report released back in April, the firm said David Jones’ Melbourne and Sydney CBD sites could be worth between $500 million and $1 billion.

Esho says despite all the mystery, it’s simply too early to tell how all this will pan out.

“I think what we’ll get over the next few days is a test of the credibility, a fact finding process, and then when that’s known, the credibility of the bid will become clear.”

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