Myer (MYR) M&A Announcement summary

Deal rationale and strategic fit

• Creates a leading retail platform in Australia and New Zealand by combining complementary strengths and customer bases.

• Expands the Myer One loyalty program and unlocks cross-shop benefits and data insights by integrating Apparel Brands.

• Enables expansion of exclusive and private label portfolios, leveraging Apparel Brands' sourcing, design, and distribution expertise.

• Enhances scale, operating leverage, and ability to invest in growth and innovation in a competitive retail market.

• Enhances market reach and positions the group to appeal to new and underpenetrated customer segments.

Financial terms and conditions

• Myer will acquire 100% of Apparel Brands from Premier in exchange for 890.5 million Myer shares and AUD 82 million in cash.

• Myer will declare a fully franked dividend of AUD 0.025 per share to existing shareholders, subject to conditions.

• Premier will distribute all its Myer shares (existing and new) to eligible Premier shareholders on a pro rata basis after completion.

• Post-transaction, Century Plaza Group will hold 26.8% of Myer, with Premier's current 31.2% stake transitioning.

Synergies and expected cost savings

• At least AUD 30 million in annual run-rate combination benefits are expected over the short to medium term.

• Synergies will be driven by loyalty program expansion, logistics optimization, sourcing, omni-channel benefits, and cost management.

• Additional savings anticipated from operational best practices, e-commerce growth, and potential refinancing.

• Significant EPS accretion anticipated on a pro forma FY24 basis after expected run-rate benefits.