Linklaters and Gilbert + Tobin are advising South African retailer Woolworths Holdings Ltd. on its proposed $2 billion acquisition of Australian department store chain David Jones Ltd.
Woolworths said a major incentive for the acquisition was to create a larger company with more bargaining power with suppliers, particularly in clothing and other fashion items reflecting Southern Hemisphere seasonality. The South African company is not related to the Australian supermarket chain of the same name, though both took their names from the fabled but now-defunct U.S. discount store operator F.W. Woolworth.
David Jones has 38 stores across Australia. Last year, the company received a $2.8 billion merger offer from rival department store chain Myer Holdings Ltd., but David Jones’ board rejected the stock-for-stock deal on the grounds that it did not offer shareholders a sufficient premium.
By contrast, the company said its board is recommending all shareholders vote in favor of the cash offer from Woolworths, which will finance its acquisition through a combination of cash, debt and equity raising. Subject to shareholder and regulatory approval, the deal is expected to close in July.
Sydney partner Hiroshi Narushima is leading the Gilbert + Tobin team acting for Woolworths, with help from fellow Sydney partners James Lewis, Gina Cass-Gottlieb, Elizabeth Avery, Peter Feros and Amanda Hempel, as well as Melbourne partner Craig Semple.
Linklaters is acting as international counsel to Woolworths, while Webber Wentzel is advising on South African law.
Herbert Smith Freehills Sydney partner Rebecca Maslen-Stannage is advising David Jones.