The now daily battle between Myer and Premier Investments has ramped up a notch, after the two parties have accused each other of lying about previous events.
Myer chairman-elect Garry Hounsell wrote to Myer shareholders claiming that while retail veteran Solomon Lew is telling shareholders not to elect Hounsell onto its board, Lew’s company Premier Investments once asked Hounsell to be chairman of Premier.
“Mr Lew is asking you to vote against me as your new chairman when the Premier board approached me to take the role of chairman at Premier in the past,” he wrote in a letter to shareholders.
Lew and Premier’s response was swift, with a message to shareholders asserting “Myer is clearly rattled by the response we have had from retail shareholders to Premier’s call for change to the Myer board, and they’re now resorting to making things up.”
“Garry Hounsell has never been offered the chairmanship nor a directorship of Premier,” the company said in a statement.
“To suggest that Solomon Lew would hand over the chairmanship of Premier to someone he only met for the first time on October 6 this year is just absurd.
“This letter is yet another attempt by the Myer board to mislead its own shareholders. It is a lie and a fabrication, and Mr Hounsell should withdraw it”.
Late last week, Premier called on shareholders of Myer to appoint them as their proxy in the department store retailer’s upcoming annual general meeting.
Lew sent out a letter addressed to other Myer shareholders asking to let the company represent them during the Myer’s general meeting so they can use the proxy to vote against the appointment of the chairman-designate Hounsell and Myer’s two other board nominees, as well as voting against all other resolutions.
“Like virtually every other Myer shareholder, we have witnessed the value of our Myer shares decline significantly,” Lew wrote.
“We have also been extremely disappointed with the level of disclosure regarding Myer’s financial performance and the outlook for the business and we feel that Myer shareholders have been misled.”
“We are seeking your support to vote against all resolutions at the upcoming AGM to send a strong message to the Myer board that shareholders want change, not more of the same.”
Lew said the Myer board (which collectively owns less than 0.1 per cent of Myer shares) has presided over the destruction of over $2 billion in shareholder value.
“The price of Myer shares has declined by more than 80 per cent since the IPO in 2009,” he said.
The retail veteran also mentioned the new Myer strategy is not working and quoted analysts about it: “the strategy doesn’t appear to adequately address low perceptions of value and service” (Credit Suisse), “… our forecasts currently assume that only one of the four new Myer targets would be achieved” (JP Morgan), “While targets have been rebased, we consider the ‘new Myer’ strategy to be broadly unchanged” (Citi Group).
“The new new Myer strategy is now actively targeting FY20 underlying earnings per share that is 65 per cent below FY11 earnings per share,” Lew stated.
Lew said that when Myer dispatched the 2017 notice of meeting in October, shareholders were asked to vote on the issue of performance rights worth more than $1 million to Myer CEO Umbers. Yet, he said, “Myer did not see fit to disclose the fact that Umbers would be rewarded for a decline in performance as compared to the original new Myer hurdles.”
“This information was only released on 1 November 2017,” he said. “These new hurdles will potentially also apply to the current executives.”
Lew also stated in his letter that Myer’s directors have collected more than $6.2 million in fees yet they own only $800,000 of Myer shares.
“The Myer board does not own enough shares to be motivated by performance,” he said. “The non-executive director fee pool has remained constant throughout the severe decline in the value of the company thereby insulating directors from the pain felt by all Myer shareholders.”
