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Allert to take chair at Coles Myer
By Geoff Hiscock
SYDNEY, Australia (CNN) -- Australia's biggest retailer Coles Myer named prominent Adelaide businessman Rick Allert as its new long-term chairman Thursday in a widely anticipated move. Allert said on Tuesday he would resign as chairman of another big company, the Southcorp wine group, so he could take the chair at the embattled retailer for longer than six months. Allert, a Coles Myer director for seven years, said he wanted to bring "continuity and certainty" to the board's leadership. Allert's decision to step down from Southcorp, where he had been chairman for 13 years, was seen as a way of defusing criticism about his workload from supporters of key Coles Myer shareholder and long-time director Solomon Lew. They argued that Allert should quit Southcorp if board renewal was the real goal of other directors who want Lew out. Lew has been at the center of a boardroom stoush at Coles Myer. Outgoing chairman Stan Wallis and seven of eight other directors are opposed to Lew's re-election at the November 20 annual general meeting. Wallis and other directors have cited the need for board renewal, and concerns over related-party transactions. Lew, whose corporate vehicle Premier Investments spent about Aust. $80 million ($44 million) last week to lift its stake in Coles Myer to 5.87 percent, has been a Coles Myer director since 1985. He is thought to have bought more shares this week, taking his stake above 6 percent. Related-party transactionsLew has a range of retail interests and supplier transactions involving Coles Myer, but said on Sunday that almost every director on the retailer's board also had related-party transactions. The other key issue in the bitter battle between Wallis and Lew is about the performance and structure of the retailer. Coles Myer, which turned over A$25.7 billion ($14 billion) last financial year from its Coles supermarkets and stores such as Myer Grace Bros, Target and Kmart, has been looking to spin off under-performing units, including Myer Grace Bros. But early last week it delayed a decision on splitting up the company until at least July 2003, citing the importance of the coming Christmas trading period. (Full story) Lew has argued against an early spinoff of Myer Grace Bros and Target. Stock in Coles Myer tumbled to a five-year low of A$5.70 early last month amid perceived poor performance by some of its units and the battle between Wallis and Lew. But they surged to a nine-week high of A$6.43 last week after the retailer lifted full year net profit 6 percent to A$354 million ($192 million). (Full story) They are trading Thursday unchanged at A$6.37 on a day when the broader market, measured by the S&P/ASX200, is down about 0.7 percent to 2891.5. Southcorp, the big wine group that includes Penfolds, Lindemans and Rosemount among its labels, said on Tuesday Allert had told the company he would seek the Coles Myer chairmanship this week and then intended then to resign as Southcorp's chairman and director on October 31. Allert said Thursday he told the Coles Myer board he was willing to accept the chairmanship on a long-term basis. "While my first inclination was to accept the position for an initial period of six months, after reflection, I have come to the firm view that the Coles Myer board and management need continuity and certainty in board leadership going forward," he said. Allert remains chairman of insurer Axa Asia Pacific.
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