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TPG, Newbridge buy Australian retailer forAU$1.4bn

In another joint acquisitive effort, Texas Pacific Group and its Asian investment arm Newbridge Capital have added Australian departmental store operator to list of retailers in TPG’s portfolio.

A consortium led by Texas Pacific Group (TPG) and Newbridge Capital, and including the Myer family office, will purchase Australia’s Myer retail business for AU$1.4 billion ($1 billion, €858 million), according to a statement. The transaction involves Australia’s largest retailer Coles Myer selling the Myer retail business as well as Myer’s flagship store in Melbourne.

Myer has 61 stores across Australia. Its business strategy focuses on four main categories: womenswear, menswear, cosmetics and soft home. It also sells electrical goods, furniture, childrenswear and toys.

The purchase of the company adds to TPG’s portfolio of well-known consumer brands and retail department stores including Debenhams in the UK, Neiman Marcus, J. Crew, Bergdorf Goodman and Petco in the US. TPG also owns Bally in Switzerland.

Commenting on the Myers deal, Dan Carroll, managing partner of Newbridge, said in the statement: “We welcome the opportunity to bring our skills and experience to Australia. Our involvement with upmarket departmental stores such as Neiman Marcus and Debenhams has been very successful, and we look forward to drawing on that experience and using those skills at Myer.”

Newbridge Capital has been investing in Asia since 1994. The group is a joint venture controlled by TPG and San Francisco-based alternative investment specialist Blum Capital Partners.

The Myers family, whose ties with the departmental stores date back to 1900, is a minority shareholder in the consortium. Paul Chen, a partner at Newbridge, said: “The return to private ownership is an exciting new chapter for Myer.”

In the statement, the chairman of The Myer Family Company, Rupert Myer, said: “The investment represents an opportunity to retain a financial interest in the Myer Department Store business.”

According to Reuters, Myer was bought by Coles in 1985 for AU$1 billion, but the Myer stores sat uneasily within the larger group, in which the family has a small equity stake. The family will now hold less than ten percent of the separated Myer business.

The TPG-Newbridge consortium became the forerunner in the bid for Myer after a rival bidder, South Africa’s Edgars Consolidated, dropped out of the race.

In separate news, Newbridge has reportedly signed a contract with China’s Xinjiang Guanghui Group to invest up to $200 million to expand the company’s liquefied natural gas facilities in China.

In a statement filed with the Shanghai Stock Exchange, the Chinese group’s listed unit Xinjiang Guanghui Industry said that out of the $200 million, $50 million would cover a funding shortage during the first phase of the project, $100 million for the planned second and third phases, and another $50 million would be used in case a bank loan cannot be secured.