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Solomon Lew threatens legal action over Myer capital raising rumours

Billionaire retailer Solomon Lew has threatened to take legal action against the Myer board if the company decides to pursue a capital raising, in a significant escalation of tensions between the two parties.

Lawyers acting for Mr Lew’s Premier Investments on Wednesday wrote to Myer’s board over reports in The Age and The Sydney Morning Herald that the retailer was on the hunt for a new cornerstone investor to take a stake in the business via a 10 per cent share placement.

Solomon Lew has threatened legal action against Myer if it chooses to pursue a capital raising.

Solomon Lew has threatened legal action against Myer if it chooses to pursue a capital raising.Credit:Daniel Pockett

This potential capital raising was floated as a way for Myer to defend itself against Mr Lew and Premier’s recent onslaught as it would dilute his recently acquired 16.7 per cent stake.

In a letter to Myer’s advisers at Clayton Utz, Arnold Bloch Leibler partner Jeremy Leibler said Premier was “astounded” Myer and its board were looking for ways to dilute Premier’s stake given the company’s recent poor performance.

“Premier can only interpret Myer’s steps to seek a capital raising as a bad faith attempt by Myer to stifle Premier’s advocacy for changes to Myer’s board and to interfere with Premier’s proposal to reconstitute the Myer board with a new independent chair and majority of independent directors,” Mr Leibler said.

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“Premier will take all steps within its power to prevent any attempt to dilute and disempower Premier through a capital raise.” This includes appealing to the Takeovers Panel or seeking court orders to prevent such a capital raise, Premier warned.

Myer has been under renewed siege by Mr Lew since early July when the rag trader acquired an additional 5 per cent stake in the company and began agitating for a seat on Myer’s board, threatening to call an extraordinary general meeting to dump the company’s current directors and appoint two of his own, alongside a majority of independent directors.

Since then, tensions between the two have continued to sour, with Myer appointing lawyers and corporate advisers Luminis Partners and reportedly exploring other options for the business, including potentially selling Myer’s fast-growing online division or raising fresh capital.

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