(Bloomberg) -- Shares of Solomon Lew’s Premier Investments Ltd. soared after the company agreed to sell its apparel brands to Myer Holdings Ltd. in a deal that cements the billionaire’s dominance across Australian retail.
The Melbourne-based department store operator will buy Premier’s five apparel brands in exchange for 890.5 million new Myer shares, the companies said in a statement Tuesday. Lew will remain Premier’s chairman and join Myer’s board. Premier shares climbed as much as 18%, their biggest intraday gain in more than three years.
“We view this as a positive catalyst for Premier Investments shareholders,” Morgan Stanley analysts including Joseph Michael wrote in a note. The company will be left with its highest-quality brands like back-to-school accessorizer Smiggle, which should support the stock, they added.
Following completion of the deal, Lew’s private investment vehicle Century Plaza Investments will become Myer’s largest shareholder with a 26.8% stake. Premier will also make a cash contribution of A$82 million ($53.8 million) under the pact.
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