March 29, 2017 / 6:09 AM / 4 months ago

UPDATE 1-Premier Investments buys stake in Australia's Myer, no bid planned

2 Min Read

(Adds details, background)

SYDNEY, March 29 (Reuters) - Australian retail group Premier Investments Ltd on Wednesday said it had purchased a 10.8 percent stake in department store owner Myer Holdings Ltd , but added it had no plans to make a takeover offer at this time.

Shares in Myer, Australia's biggest department store operator by sales with a market value of A$980 million ($748.23 million), surged 18 percent on Monday after about 10 percent of the stock changed hands in a single trade. That sparked speculation of corporate activity.

At Monday's price, Premier bought the stake for around A$100 million, according to Reuters calculations.

Premier's largest shareholder is Century Plaza Investments, whose director and major shareholder is Australian retail magnate Solomon Lew, a former chairman of Myer's predecessor Coles Myer.

Lew has previously used shareholdings to gain leverage in takeover situations, including David Jones and Country Road.

Lew bought a 9.9 percent stake in rival department store owner David Jones before it was taken over by South Africa's Woolworths Holdings Ltd in 2014.

Myer shares closed down 0.4 percent on Wednesday before the announcement from Premier. A Myer spokesman could not be immediately reached for comment.

$1 = 1.3098 Australian dollars Reporting by Jamie Freed; Editing by Randy Fabi

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