Myer Eyes Float After Economy Dodges A Bullet

  It's not only the economy that the federal government's spending splurge and the Reserve Bank's rapid cuts have helped.Consumers, retailers and sharemarket investors, plus home owners banks and real estate agents have been helped, now it's private equity which has cause to thank the government and the central bank.The government stimulus spending and record low interest rates have helped the private equity owners of the Melbourne-based department store, Myer, out of a hole.The slump and near recession triggered by the global credit crunch and then slowdown, had seen the float of the group by TPG and its partners (Myer family) go cool on when the eventual float of the retailer would happen.But with retail sales resisting following sales in markets like the US and UK lower, thanks to the 4.25% cut in rates and the & #36;42 billion and more of stimulus spending from the federal government, the float is back on. & #160;Not even a downturn in June, featuring a big fall in department store sales, was enough to force a last minute change, even though the company sees sales remaining sluggish until Christmas.Myer upgraded its 4th quarter sales, as did rival David Jones a month ago (David Jones updates us today on its final 4th quarter sales).The rebounding sharemarket has helped change attitudes to the float as well.Myer says the review process & #160;for the float, which was due to happen 39 months into the 50 month turnaround, had begun but that any decision to push the button on a listing would be made by TPG, the Myer Family Company and Blum Capital. & #160;They would consider a range of factors including market conditions and potential demand for alternative ownership. & quot;As a result there is no certainty that an IPO will occur, and no assurance can be given about the timing of any IPO, & quot; Myer said in a statement.Myer said it had recorded solid fourth quarter sales and its turnaround progress was ahead of schedule.In June Myer issued a profit upgrade for the second half of the year as its customers responded positively to promotional offers, improved marketing and the second government stimulus package.Myer said it expected earnings before interest and tax (EBIT) and net profit for the full year to July 25 to show & quot;mid to high single-digit increases & quot; against an earlier forecast of a similar result to 2007-08. & quot;If an IPO occurs, a disclosure document will be made available when the relevant securities are offered and anyone who wishes to acquire securities in the IPO will need to complete the application form in the disclosure document, & quot; Myer said yesterday.As part of the float review process Bill Wavish has advised Myer that he will be stepping & #160;down as executive chairman of the group and as a director of Myer effective immediately.Myer chief executive Bernie Brookes said: & quot;Bill's significant contribution to the progress of the Myer business through the turnaround phase of the business is widely acknowledged. & quot;While he has elected to scale back from his full time commitment it has been mutually agreed that he will be retained in a non-executive capacity for a further twelve months to July 2010 as a consultant to Myer management to provide his invaluable input through the transition from the turnaround phase to the growth phase. & quot;Howard McDonald has been appointed as non executive chairman of Myer. He has been a director of Myer since 2006.He is the former CEO of Pacific Brands. & #160;  

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