Solomon Lew releases another scathing letter calling on Myer to release first quarter 2019 results
Written on the 31 October 2018 by David Simmons
On the 31st of October, it is customary to dress up in a spooky costume, cue a B-grade horror on Netflix, and donate lollies to roving groups of enthusiastic neighbourhood kids.
Solomon Lew has taken Halloween quite literally this year, issuing another blistering letter aimed at Myer's chairman Garry Hounsell, that's sure to have him trembling in his (Myer bought) boots.
It hasn't even been a week since Solomon Lew, chairman of Premier Investments, called for the Myer board to be replaced.
Now, Lew and Premier Investments (who are Myer's largest shareholder) are demanding Myer release its first quarter 2019 results.
Lew believes that Myer's shares are trading on an uninformed basis, and that the company release its sales results and profit forecast to properly inform the market ahead of its AGM.
"Premier is considering its legal and other regulatory options in order to ensure that Myer shares are being traded in a fully informed share market," says Premier Investments.
"Myer had a devastating past year and wrote off almost half a billion dollars of shareholders' funds. Myer shares are currently languishing at around 46 cents (this time last year, just under 80 cents)."
This move directly mirrors Lew's 2017 playbook. Last year he called on Myer to release its first quarter results which were eventually forced out and demonstrated that its first quarter 2018 results had fallen by 2.8 per cent a huge loss of profit for the retailer.
The impact of this bombshell saw the company's board receive its "first strike" from shareholders. If a similar thing happens at Myer's AGM, to be held on November 30, the Board will face a motion to be spilled.
Premier Investments also called out Myer's allegedly unfair deal with the banks.
"To add insult to injury, this sales information and other key metrics are no doubt being provided monthly to Myer's bankers who have recently, for the first time, taken security over all Myer assets as part of a significantly increased cost for their new banking facility," says Premier Investments.
"If the information is key to the banks' assessment of their position, it is equally relevant to the shareholders, suppliers, employees and landlords who have a similar need to assess their positions and futures within Myer."
"Given the ongoing revelations of the Royal Commission into the major banks, it would be disappointing to see the big banks being given such preferential treatment over the interests of hundreds of thousands of ordinary Australians."
"How can Myer stop providing information to the market at the same time as handing it over to its banks? How can Myer shareholders be kept in the dark ahead of a crucial vote, when Myer's bankers have all the information in front of them?"
This letter puts the Myer board in a tricky position either face the music by releasing its first quarter results or hold onto them and enrage Solomon Lew even further.
Shares in Myer are up 2.17 per cent to $0.47 per share at 11.02am AEDT.
Business News Australia
Author: David Simmons