The Sydney Federal Court approved on Thursday the $2.2 billion sale of Australian department store David Jones to Woolworths Holdings of South Africa. The go signal came after shareholders of the second-largest department store in the country approved the sale on Monday.
The court rejected some of the concerns brought up by the Australian Securities and Investment Commission (ASIC), paving the way for the sale which would result in shareholders being paid about $3.75 each as part of the deal.
ASIC threatened to withhold a letter of consent for the sale and raised concern that Woolworths' bid for Country Road was a multimillion dollar inducement to rag trade Solomon Lew who got a 9.9 per cent stake in David Jones in June, which triggered fears that Lew would try to block the sale unless Woolworths would purchase his 11.8 per cent stake in Country Road at a premium price.
Friday, July 18, is the last to trade David Jones shares in the Australian stock market. Shareholders would receive $4 per share cash on Aug 1.
The 176-year-old department store, an icon in Australia's retail industry, has 38 stores across the country and has become a household name, but it decided to sell out after struggling for years against weak sales as online retailers capture a larger share of the market.
"This is a very exciting moment in the history of both Woolworths and David Joes and a major milestone in our strategy to become a leading Southern Hemisphere retailer," said Ian Moir, chief executive of Woolworths, which is not related at all to the Australian grocery giant with the same name.