‘Grace Bros saga’ comes to end

Press, 29 June 1983, Page 21

‘Grace Bros saga’ comes to end

PA Melbourne Myer began its pursuit of control of Grace Bros last March, taking the 19.7 per cent of the issued ordinary capital held by the Singa-pore-controlled Savona Pty, Ltd, for sAust39.7 million. The purchase came six weeks after Grace Bros announced that it was buying most of Myer’s retail operations in New South Wales and the A.C.T. for $65 million. Myer’s deputy chairman, Joh Dahlsen, said in March that the company had no plans to buy any further Grace Bros shares on the market or to seek representation on the Grace Bros board. . . However, the earliest roots of the Grace Bros saga sprouted in May, 1982, with the purchase of shares in the retail discount group Norman Ross. Grace Bros and Waltons Bond each revealed holdings of almost 20 per cent in issued Norman Ross capital. In June, 1982, Grace Bros «t the 36 per cent of an Ross stock ieldbv its two founders, and Waltons Bond increased, its

stake to 30 per cent. Large parcels of Grace Bros shares began changing hands on the market and on June 17 Bond Corporation, the major shareholder in Waltons Bond, announced that it held 9.4 per cent of Grace Bros. The next day Grace Bros revealed that a defence was being mounted with the assistance of an unknown investor, while Bond Corporation announced its holding had reached 20 per cent On June 21, 1982, Adsteam, the parent of retailer David Jones, Ltd, revealed an 18.2 per cent holding in Grace Bros while Savona ws revealed as the white knight, purchasing Grace Bros stock in defence of Grace Bros. Eight days later Woolworths announced a takeover bid with a view to a friendly merger of the two retailers. On July 26, 1982, Grace Bros announced the sale to Waltons Bond of its holding in Norman Ross. The next month, Grace Bros released preliminary final figures showing a 25 per cent drop in profit

Woolworths withdrew its bid claiming that the preliminary result represented a change in the position of Grace Bros which the Woolworths board saw as materially adverse, and so contravened a condition of the take-over offer. The matter was referred to court by Adsteam and Bond Corporation. The court found in favour of Woolworths in December, 1982, ending the Woolworths bid. Grace Bros emerged on the offensive on February 11 in a joint announcement with Myers that Grace Bros would buy most of Myer’s NSW operations while Myer would take over from Grace Bros a proposed department store at Strathpine in Queensland. Grace Bros agreed to pay Myer sAust6s million in cash. Last month, after both the Myer and Bond Corporation take-over offers had been formally t received, t Bond Corporation began ’ legal proceedings in the A.C.T. Supreme Court, initially successfully forcing Myer to amend its preference share alternative.