The Premier split could unlock more than $1b in value

afr.com:

Happy days for UBS deal makers Kelvin Barry and Jon Mant, who have snagged the lucrative gig of advising Premier Investments on whether to split the Solomon Lew-controlled retail and investment group into four separate ASX-listed companies.

The market certainly liked the news, sending shares 12 per cent higher and giving the company a market capitalisation of almost $3.9 billion on Monday.

But that review, sources said, is expected to take some time. Executives at the various brands being considered for a spin-off – Peter Alexander, kids’ stationery shop Smiggle and Premier’s remaining retail brands, including Just Jeans, Portman and Jacqui-E – have yet to be consulted.

Solomon Lew in Melbourne on Monday. Eamon Gallagher

UBS is expected to keep working on the project until at least the middle of next year, and that was a “conservative estimate”, according to one source close to the deal.

No doubt there will be plenty of conjecture about what each of the spin-offs would be valued at. According to brokers at Unified Capital Partners, Smiggle could be worth some $1.19 billion in its own right. Peter Alexander, which sells luxury sleepwear, would be valued at $1.59 billion, while the remaining apparel brands would be worth $915.5 million, they said.

Adding in property holdings, Premier’s massive cash pile – estimated to be some $477.7 million this financial year – and the stakes in Myer and Breville, the entire company could be worth around $5.33 billion. Shares closed at $24.41 on Monday; if Unified’s view is correct, it should be $33.46 per share.

At more than $30 per share, Lew’s personal fortune would grow by some $500 million. Coincidentally, that’s just about the market capitalisation of Myer. Premier, which would