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EBPE Makes $1.67bn David Jones Bid

By   /   June 29, 2012  /   No Comments

News reports are emerging that EB private equity (or EBPE) have made a bid for David Jones, Australia’s oldest department store chain.

The firm is said to be relatively obscure according to market analysts, and its website lists only basic information regarding its strategy. In addition, little contact information is provided.

The obscurity of the firm has led David Jones to be cautious in its initial assessment of the situation.

A David Jones statement read: “No details of EBPE’s financial capacity, its management, or any of the terms of the residual equity have been made available. No further details in relation to the proposal have been provided.”

Nevertheless, David Jones stock appreciated 15% on the back of the news, with share prices rising from A$2.59 to A$3.12.

David Jones was pushed into revealing the buyer’s identity after a news article appeared on the young ‘newcastleetcfinanceblog‘, a blog which claims to inform regarding financial developments affecting the North East of England.

The post claimed that EBPE were “being advised by Jones Lang LaSalle, Chalkhill Partners and other advisers.” When questioned regarding the veracity of these claims, however, Chalkhill’s CEO Stuart Booth said that he had never heard of EBPE, and that the firm was “not involved.”

The Australian department store has been seen as a potential leveraged buyout target for some time.

Its share price has been consistently decreasing over the past 12 months, falling as much as 40% in that time frame.

Part of the reason for this decline has been the minimal proportion of online retail that the business conducts. This FT article points out that where John Lewis, the UK based department store, generate 17% of their revenue online, David Jones’ figure is closer to the 1% mark.

Nevertheless, given its age, it owns many of its assets, rather than leasing them. Among them are hugely valuable flagship stores in Australia’s dominant commercial areas – Melbourne and Sydney.

Photography attributed to: paul bica / Foter

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