Department store David Jones has revealed that the UK private equity firm behind a $1.65 billion bid for the company, has withdrawn its offer.
As previously reported on ragtrader.com.au, David Jones confirmed late last week that EB Private Equity (EBPE) was behind the takeover offer, for a 100 per cent acquisition of the retailer.
This was based on $850 million of equity provided by an EB Private Equity led consortium, $450 million of lending provided by a syndicate of banks and investment institutions and $450 in residual equity for existing David Jones shareholders, a portion of which would be underwritten.
However, David Jones now claims that EB Private Equity has decided to withdraw its offer, with the company informed of the development via letter yesterday afternoon.
According to the correspondence, EB Private Equity backed out because “recent publicity of its proposal has made it difficult to proceed”.
Going forward, David Jones said: "In light of today's advice of a withdrawal of the proposal, no discussions are anticipated.”
In the wake of this new development, David Jones has also released documents detailing the correspondence between the company and EB Private Equity.
The document states that David Jones initially "had concerns about EB Private Equity's expression of interest and noted that the value indicated in the letter [of interest] significantly undervalued the company”.
David Jones has also noted that in its response to the June 29 proposal by EB Private Equity, it requested further information and clarification from the firm and invited its prospective suitor to make contact with the chairman of the company to discuss details of the offer.
According to the company, shortly after (July 2), David Jones received a letter from EB Private Equity informing that it had decided to withdraw its proposal.
Subsequently, David Jones has requested and has been grated a trading halt on the Australian Securities Exchange.