David Jones shares soar 20%, confirms $1.6 billion takeover bid from EB Private Equity

Retail giant David Jones has updated the market after confirming it received an unsolicited takeover approach from EB Private Equity, in a bid that could value the company as much as $1.65 billion.

David Jones told the Australian Securities Exchange this morning it had received an unsolicited letter from a non-incorporated UK entity indicating its interest in making an offer for the retailer, but later updated the market about the deal.

In a statement, the company said EB Private Equity had put the deal forward, offering $1.6 billion for 100% of the company. 

In the formal offer provided to the company, EB said the deal was based on “$850 million of equity provided by the EBPE led consortium, $450 million of lending provided by a syndicate of banks and investment institutions and $450 million in residual equity for the existing David Jones Limited shareholders, a portion of this residual equity shall be underwritten”.

On its website, EB says the company is a European-based investor in real estate and developments, saying it has “developed an expertise in real estate investments that ranges from investments in commercial (office and retail), leisure and alternative asset class investments”.

It is believed that David Jones chief executive Paul Zahra is currently in Europe on holidays.

Earlier this afternoon, David Jones said the approach was made by a non-incorporated UK entity about which ”no usual public information is available”.

“The directors do not believe they currently have relevant information to enable them to qualify or value the approach but should this change will advise the market accordingly,” David Jones said in a statement this morning.

”In the meantime, the directors recommend that shareholders treat related market comment cautiously.”

Shares in David Jones soared almost 20% higher on the back of the news.

Telstra in breach of Privacy Act

Telstra has been found to be in breach of the Privacy Act as well as the Telecommunications Consumer Protections Code, after the personal information of hundreds of thousands of customers was made available online last year.

Australian Privacy Commissioner Timothy Pilgrim said this morning the company had failed to protect consumers’ information.

The breach saw 734,000 names and in some instances, addresses, made available online. Pilgrim said an investigation of the company revealed many internal errors.

“I found the privacy breach occurred because of a series of errors revealing significant weaknesses in Telstra’s reporting, monitoring and accountability systems”, Pilgrim said in a joint statement with the Australian Communication and Media Authority.

“Of particular concern is that a number of Telstra staff knew about the security issues with the database but did not raise them with management.”

Queensland Government accuses Origin of price gouging

The Queensland Government has accused Origin Energy of price gouging, with Energy Minister Mark McArdle saying the government will seek legal advice.

“They are price gouging. Origin is price gouging, it’s as simple and as straightforward as that,” he told ABC Radio.

“This government will not stand for that … it’s not fair, they were told from day one they would be compensated for relevant losses.”

Sharemarket inches down

The Australian sharemarket has inched down at the open, on the back of weak leads from Wall Street overnight amid a continuing European leaders’ summit.

At the market open, the benchmark S&P/ASX 200 index fell 0.17% to 4,037.9 points, while the broader All Ordinaries Index slipped 0.17% to 4,078.4 points.