Myer has launched a takeover bid for a group of retail clothing brands including Just Jeans and Jay Jays.
The department store announced today it had approached billionaire Solomon Lew's Premier Investments to acquire its Apparel Brands portfolio.
On top of Just Jeans and Jay Jays, it also includes Portmans, Jacqui E and Dotti, with 717 stores across Australia and New Zealand that generated $845 million in revenue last financial year.
The move would see Premier issued with shares in exchange for the acquisition and leave Lew as Myer's largest shareholder – albeit with a smaller share than what Premier currently holds in Myer.
Lew would also join Myer's board under the deal.
New executive chair Olivia Wirth said acquiring Apparel would help boost Myer's business.
"Against the backdrop of a changing retail landscape, Myer has commenced a thorough review of its strategic direction and growth opportunities... as part of this review, Myer is exploring both organic and inorganic investment opportunities that align with our strategic focus areas to create value for Myer shareholders," she said.
"It quickly became clear that the idea of a combination of Myer and Apparel Brands offered significant potential synergies and prospects for growth, evidently warranting further examination."
Lew and Premier indicated they would be open to the deal, although said it would need to be considered further.
"Premier also believes that there may be meaningful opportunity for both businesses from the proposal," it said in a statement to the ASX.
"The proposed combination has the potential to deliver a step change in Myer's scale and market position, deliver synergies and drive sustainable earnings growth.
"Premier shareholders would benefit given Premier's existing shareholding in Myer and because Premier shareholders would become shareholders in Myer."
The deal would require shareholder and board approval from both Myer and Premier, as well as regulatory bodies like the ACCC and ASIC.
Both companies' share price jumped following the announcement of the proposed merger – Myer's by 20 per cent, Premier's by just under 7 per cent.
