Could a relic of the days
when Myer owned Melbourne’s Highpoint shopping
centre add a new roll of the dice to the sale of the department store group?

Talk has been that
Westfield holds all the aces, as it
must approve any new owners as lessees of many Myer stores in
Westfield centres. Part of the trade-off for
Westfield’s approval of new owners
could be the ownership of the prized Melbourne CBD site. So a possible scenario has
Westfield getting the Bourke &
Lonsdale stores for redevelopment, and the remaining Myer stores going to
others, with Westfield’s approval.

In a seemingly unrelated deal,
Westfield has been outbid by General Property
Trust for the purchase of a big piece of Highpoint from the Besen family for
around $500 million. However, Myer has
first right of refusal over any sale of the shopping
centre.

The
Age
quotes GPT
chief executive Nic Lyons saying Myer had 30 days to respond and that further
information would be provided after that. But GPT
believed the clause allowing Myer first right of refusal was a historical
hangover from its original lease. A bit
dismissive?

Given Coles Myer is actively engaged in a likely sale process, it
appears unlikely that they will have a lot of interest in acquiring
real estate. But do they now have a handy bargaining tool to give a leg
up to Westfield’s attempt to acquire Highpoint? So might Myer use its
first right of refusal as part of a more complex deal?

Meanwhile, Glenn Dyer reports:

The
reason for John Fletcher’s retirement from the Telstra board suddenly seems a
little easier to understand after the release of underwhelming figures from the
retailer for second quarter sales this morning. After a
5.6% headline rise in group sales in the first quarter, Coles Myer today
reported a 3.1% top line growth in second quarter sales, which covered the
Christmas period. That produced a 4.2% growth in first half
sales. Coles’
shares fell sharply on the less than impressive figures, shedding 43c in
reaction by 11.45am, down to $9.57 (the low was $9.49). Woolies share price
rose sharply for the second day in row, adding 23c this morning to
$17.80.The
extent of the problem was shown in the comparable store
comparison.

Peter Fray

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