The $2.2 billion foreign takeover of David Jones will go ahead, after the Federal Court approved the sale of Australia’s oldest department store to South Africa’s Woolworths.
Justice Kathleen Farrell gave the go ahead to the takeover at a hearing in Sydney on Thursday, paving the way for Woolworths to take control of David Jones on August 1.
David Jones shareholders on Monday voted overwhelmingly to accept Woolworths $4-a-share offer, despite a small number criticising the foreign takeover of an iconic Australian company.
The corporate regulator, the Australian Securities and Investments Commission, refused to provide a letter of consent for the David Jones takeover but did not oppose the court application to approve the deal.
ASIC’s counsel John Halley SC said the regulator was concerned about Woolworths’ offer to pay retail mogul Solomon Lew, who owns almost 10 per cent of David Jones, more than $200 million for his stake in fashion retailer Country Road, apparently in an effort to convince him not to oppose the takeover.
He argued that amounted to a collateral benefit not available to other shareholders in the department store.
“ASIC remains of the view that the incentive that was provided did constitute a collateral benefit to Mr Lew,” he told the court.