** Morningstar sees 100% possibility of Australia's Myer

merging with five of rival Premier Investments'

brands

** Myer, a department store owner will buy retail billionaire Solomon Lew's Premier Investments' apparel brands business, in a deal valued at A$863.8 million ($568.38 million)

** Myer's merger with Premier's apparel brands offers something for everyone - Morningstar

** Brokerage estimates Myer is slightly overpaying for the deal on a stand-alone basis but expects cost saving to materially lift earnings

** Lifts fair value estimate of Myer by 11% to A$0.83, keeps A$20.5 estimate on Premier

** Says the shares of both firm's are significantly overvalued while anticipating intense competition among major discretionary retailers

** MYR has risen 59.2% this year, as of last close while PMV is up 23%

(Reporting by Rishav Chatterjee in Bengaluru)

((Rishav.Chatterjee@thomsonreuters.com;))