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Myer board vulnerable to Lew after it loses kingmaker’s protection

In doing so, the Myer board has lost its security blanket.

Tagliaferro wasn’t alone. Over the past month, a staggering 71 per cent of Myer’s shares have changed hands. But neither Lew nor Myer’s 7.8 per cent shareholder Geoff Wilson appear to have traded shares.

So that accounts for most remaining shareholders.

Given there have been no substantial shareholder notices posted during that period, no institutional investors have built a strategic stake. In the previous month, Credit Suisse Nominees appears to have borrowed a stake of 8.9 per cent of Myer, which suggests it has punted on a massive short.

All this creates pretty fertile ground for Lew should he decide to renew his quest to topple the board. The share register appears even more dominated by retail investors (who were more supportive of Lew) and short sellers.

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Hounsell should be praying that Lew’s fighting spirit has been doused by COVID-19, which has diverted the billionaire’s attention to keeping an eye on his own retail businesses whose shops were closed for months at the height of the health scare.

Whether Lew mounts another campaign remains to be seen. But he now looks to have plenty of leverage.

It could be that given the (now) paltry value of Myer’s share price — it was 28¢ on Wednesday and traded as low as 10¢ in March — it could be that it is not worth Lew’s while to invest his time or resources.

Lew bought his 10.8 per cent Myer stake in early 2017 for $1.15 a piece which, incidentally, looks to be about the same entry price paid by Tagliaferro.

So no winners there.

Myer has gained some strategic ground during the closure of its stores at the height of the pandemic — its online sales have picked up and pre-pandemic there were signs that its net profit had stabilised despite the continued fall in sales. It is also understood to have made positive ground on the renegotiation of some of its onerous leases.

Lew has also been generally supportive of John King, the chief executive Myer imported from the UK. But supportive just means Lew has not engaged in a public attack on his competence.

Most of the issues that Lew had complained about two years ago remain today — the product mix and the level of discounting.

And fixing them only becomes more difficult in the current environment of depressed retail sales, an economic recession and a looming spike in unemployment.

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