Just Group this morning rejected Solomon Lew’s Premier Investments’ “unsolicited and opportunistic” takeover offer of $835 million.
Lew already has a strong position in Just Group, with a stake of more than 23% of the company.
An independent expert’s report from Longergan Edwards valued Just Group at between $4.78 and $5.28 per share and the report indicated Premier’s offer of $3.97 to $4.23 per share was “neither fair nor reasonable”.
Just Group chairman, Ian Pollard, said Premier’s opportunistic offer materially undervalued the company.
“It does not adequately recognise the value of Just Group’s strongly performing business, our leading market positions in the fast fashion retail sector and our excellent growth prospects.
“Just Group has an exceptional management team, with outstanding experience and skills in retailing, that has delivered seven years of continuous sales and profit growth and excellent financial returns.
“Just Group continues to be well positioned for strong future growth,” Pollard says.
Recent trading across the group portfolio supported the company’s 2008 pro forma forecast, he says.
“We have also undertaken a review of Just Group’s strategic plan. As a result, we have increased our 2010 profit goal from at least 38.4 cents earnings per share (EPS) to at least 40 cents EPS. If achieved, this will represent double digit EPS growth on average for the remaining two years of our strategic plan.
“The Premier offer is structured to suit Premier’s objectives, not the interests of Just Group shareholders,” Pollard says.
He said each member of Just Group’s special board committee who held Just Group shares intended to reject Premier’s materially inadequate offer. The committee urged all shareholders to do the same.
While Lew had flagged plans to continue Just Group’s expansion through acquisitions and growth of existing businesses, Just directors were concerned the conflicting priorities within Lew’s investment portfolio might adversely affect potential growth opportunities for the group.