A NEWCASTLE-BASED private equity firm which came to international attention when it made a £1.1 billion bid for a major chain of Australian department stores has withdrawn its offer.
EB Private Equity, which has bases on Tyneside and in Luxembourg, tabled an offer for the David Jones business late last week, causing the Australian retail giant’s shares to shoot up in value by around £107m.
When the upmarket retailer revealed yesterday that the offer had been withdrawn, shares were offloaded and the company saw its value drop by more than £90m.
The bosses of Australia’s oldest department stores have said they had exchanged emails with the company and were waiting for more information about the bid and its backers.
There has been Press speculation around the world about the background to the equity company which gives its address as Low Friar Street, near Newcastle’s Chinatown.
The address is for an outlet which manages mailbox addresses.
However, in response to an email to EB, its chairman John Edgar called The Journal to explain why his company decided to walk away from the deal.
“EB has withdrawn its offer for David Jones. It has become clear the board of David Jones didn’t want to engage with us. We have walked away completely,” he told the paper exclusively.
“We worked for about four months on the deal with various advisers in the property and financial sector in Australia and here in the UK.
“The main attraction was the substantial property assets as part of their portfolio. We structured a deal that was a very workable deal, in our opinion.”
He said the latest offer was the second made to David Jones after an initial bid, made around a month ago, was rejected as too low.
“The goal was to sell off the assets. They have 25 or 26 department stores and extra property but they only own four of them. The rest are owned by landlords.
“The four they own are very good, in places like Sydney and Melbourne. They account for 25% of their turnover.
“In Sydney, there was a particular development opportunity with one of the stores. We were going to sell that off very early on and we were going to work with local investors to put equity into the deal.”