Lew tables final Just offer

MELBOURNE: Premier Investments today (July 23) raised its bid for Just Group, offering a suite of enhancements including more cash to shareholders if it achieves 90 percent control of the company. Premier's offer has risen to $2.245 cash - a 15 cent increase on the previous offer - and 0.25 Premier shares for each Just share. The enhanced offer represents a 43 to 58 per cent implied takeover premium.

Speaking at a special lunchtime briefing, Premier head Solomon Lew confirmed "the offer is final", adding, "major players on the Just Group register have indicated they're prepared to accept the offer, so we're very pleased."

Lew said the offer was underpinned by Premier's strong trading position.

"The trading price of Premier shares would have to fall massively for Just Group shareholders to lose out."

Just Group's earnings outlook for FY2008 to FY2010 had substantially deteriorated, meaning further delay would put the company at risk.

"We could keep extending the process 30 days at a time but we don't want to see the [Just Group] business deteriorate further."

Lew also made clear his wish to own 100 per cent of Just Group, adding this would give Premier a mandate to overhaul the business, potentially comprising enhanced product and an expanded brand stable.

Premier would also consider replacing elements of current management, although Lew confirmed he was  "fully supportive" of current Just Group CEO Jason Murray.

"We can mentor Jason. There's a good management team but they have lost their way."

Poor product had been a key problem for Just Group in recent times, leading to heightened discounting activity and a growing gap between rental overheads and sales earnings.

Claiming he was unfazed by predictions of tough trading conditions over the next 18 months, Lew said Premier's plan was to build Just Group's brand offering in the ready-to-wear, middle market, he said.

"We're long term players. We know this business very well and it’s a business of brands."