The Myer Holdings Ltd (ASX: MYR) share price is gaining today as Premier Investments Limited (ASX: PMV) sends in its lawyers.
Shares in Myer have shot up 6.9% as the close of trade nears, and are currently trading at 46.5 cents apiece.
Meanwhile, the Premier Investments share price is down 2.5%, sitting at $26.89. That's lower than the broader market. The S&P/ASX 200 Index (ASX: XJO) is down 1.4% right now.
The movements follow Premier's announcement that it's called on its lawyers to retrieve the Myer shareholder register ahead of its plans to call an extraordinary general meeting.
Let's take a look at why investors are driving the Myer share price higher today.
Quick refresher
The Myer share price gained a whopping 14% on Tuesday after reports emerged that Solomon Lew, the chair and largest shareholder of Premier Investments, was buying up shares in Myer through the investment company.
Lew already held 10% of Myer's outstanding shares. He has now increased that holding to more than 15%.
Yesterday, Myer responded to Lew's increased holding, offering up the possibility – though, not a guarantee – of a seat on the retail monolith's board.
The latest news
Today, the niceties have gone out the window.
Premier released a 105-word statement on Myer, in which it detailed its plan for a shareholder vote on the company's management. Premier said:
In Premier's view, Myer's three remaining non-executive directors should for once put its shareholders first and resign immediately. Any other action would be futile, and costly for Myer shareholders who have endured enough.
According to reporting by the Australian Financial Review (AFR), Lew believes the Myer non-executive directors have destroyed $760 million of shareholder value.
Additionally, the billionaire retailer pointed to the numerous leadership changes Myer has undergone since 2017 as one of the reasons for the losses.
Myer reported earnings before interest, tax, depreciation, and amortisation (EBITDA) of $206.2 million for the 2016 financial year. In the 2019 financial year, its EBITDA was $160.1 million. And in the 2020 financial year, its EBITDA was $93.5 million.
The Myer share price fell 76% between the release of its 2016 full-year report and its 2020 full-year report.
Myer share price snapshot
The Myer share price has gained around 55% year to date – helped along by a 20% increase which appears to be brought about by news of Premier's increased investment.
Myer shares have also gained more than 121% since this time last year.
The retailer has a market capitalisation of around $357 million, with approximately 818 million shares outstanding.
