South African retailer Woolworths Holdings' offer to buy out Solomon Lew's stake in Country Road exceeds the fashion chain's estimated value range, an independent expert says.
Woolworths' $213 million bid to mop up Country Road was seen as a sweetener for Mr Lew after he loomed as a potential blocker of its David Jones takeover.
Lonergan Edwards and Associates said Woolworths' $17-a-share offer to Country Road's minority shareholders was fair and reasonable.
It valued the shares in a range of $14.92 to $16.22. The offer price represented a multiple of 25 to 28 times Country Road's expected earnings per share for 2013-14.
The expert attributed $130 million to $160 million of value, or $1.26 to $1.54 per share, to expected benefits for Country Road from Woolworths' takeover of David Jones.
After securing a stake of about 10 per cent in David Jones, Mr Lew did not oppose the South African company's takeover of the department store operator in last week's shareholder vote.
Woolworths already own about 88 per cent of Country Road. Mr Lew holds 11.9 per cent.
Country Roads shares were untraded at $16.55 this morning.