After denying the rumours, it looks like where there's smoke, there's fire.
๐ Background: Department store David Jones has been around since 1838, but it was bought by Woolworths (the South African one, not the fresh food people) in 2014 for $2.2 billion.
๐ What happened: David Jones has posted some serious losses lately - $785 million in 2018 and $489 million in 2019. The company has even slashed floor space in its Melbourne and Sydney flagships.
๐ What else: While there have been reports of Woolworths entering talks to sell DJs for a while, things are reportedly getting more serious. Woolworths even set up a 'data room' to help potential buyers run the numbers.
๐ก When it comes to mergers and acquisitions, data rooms (also called 'deal rooms') can be super important. Data rooms are basically an online 'room' or 'warehouse' where all the key documents about a company are stored.
๐ก When a company becomes very interested in buying another company, they want to know everything about it, warts and all. Having a data room ready helps facilitate the due diligence process that buyers complete before a deal.
๐กBy setting up a data room for potential approved buys like private equity funds, it sounds like Woolworths is getting serious about a David Jones sale.
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