The merger of Premier Investments’ (ASX: PMV) Apparel Brands business with Myer Holdings (ASX: MYR) department store operations has been given the green light by shareholders of both companies who voted overwhelmingly in favour of the transaction at separate meetings held this morning.

While all the votes are not in, 95.45 per cent of direct and proxy votes from Myer shareholders have approved the merger, and 99.8 per cent of votes from Premier Investments shareholders have also approved the deal.

The vote paves the way for Premier’s Apparel Brands, comprising the Just Jeans, Jay Jays, Portmans, Jacqui E and Dotti, to join the Myer business in a scrip-based deal that is worth $817 million based on today's Myer share price.

Under the agreement, Premier Investments shareholders will control more than half of Myer’s shares, as well as their existing interest in Premier Investments which plans to then focus on growing its highly profitable luxury sleepwear chain Peter Alexander and stationery business Smiggle both domestically and internationally.

“Our strategic vision is to create a leading Australian retail platform, by identifying opportunities to deliver a step-change in Myer’s market position and generate substantial strategic and financial benefits to create value for you, our valued shareholders,” Myer’s executive chair Olivia Wirth told shareholders ahead of today’s vote.

“The combination with Apparel Brands accelerates our strategic priorities and given the challenging trading environment; this task is more important than ever.

“As shown in our trading update released last week, Myer has not been immune from the cost-of-living crunch affecting the broader retail sector and other parts of the economy, both in Australia and around the world.

“It demonstrates why it is crucial for retailers to continually innovate and evolve to strengthen and grow their businesses.”

Myer last week reported total sales of $1.59 billion for the 22 weeks to 28 December which was 0.8 per cent lower than a year earlier

The combined Myer and Apparel Brands business will deliver the group a business with more than $4 billion in sales annually from a footprint comprising 783 department and specialty stores in Australia and New Zealand employing more than 17,000 staff.

“The combination creates a more resilient Myer Group, with genuine and significant scale across Australia and New Zealand, an omni-retail business with diversified earnings, a larger customer base that spans more Australians across all demographics,” says Wirth.

“It enables us to leverage MYER one across an enlarged customer base, which will provide valuable customer insights to drive incremental sales over the longer term.”

An independent expert’s report released last month assessed the deal to be fair and reasonable, valuing the Apparel Brands on a controlling interest basis between $848.3 million and $946.3 million.

However, with the fall in Myer shares since then, the 890.5 million shares being issued to acquire Apparel Brands is worth $817 million today.

Once all conditions are satisfied, the merger is scheduled for completion on 26 January 2025.

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