Solly Lew’s decision to accept an offer of $16.47-a-share for the 69.5 million Coles Group shares owned by Premier Investments is a smart move that leaves him cashed up to have a crack at Target.

However, he won’t see all of the $1.15 billion that Wesfarmers, Private Equity Partners and Macquarie Bank have paid for the stock. Solly personally owns 52.4% of Premier which is still saddled with $250 million of debt — a legacy of the billionaire paying too much for Westfield’s stake in Coles Myer way back in 1989. Frank Lowy got out to try and save his fortune which was being whittled away in the Ten Network.

Coles shares were trading at $8.46 on July 23, 1989, when Premier forked out $450 million for 40.7 million shares at $9 a pop, today’s equivalent of 91.5 million shares at $4.91 after adjusting for a five-for-four bonus issue in 1992. This was too big a bite and ultimately caused the Yannon scandal as Solly’s empire wobbled during the Keating recession we had to have and 17 per cent interest rates. ANZ bought some of the shares a couple of years later to try to save Solly’s empire.

Premier Investments was trading at $1.73 at the time and was geared to the eyeballs, so investors who have stuck with Solly over the years have done very well indeed with Premier shares opening at $8.30 this morning, before shooting up to $9.00.

The sale will crystalise a significant capital gains tax bill for Premier, so if the net cash is distributed to shareholders, Solly will probably pocket around $400 million. The veteran rag trader is probably wishing he’d hung on to the other 84 million Coles Myer shares that he personally owned but dumped for $706 million or $8.38-a-share in early 1999.

It’s true that Solly has profitably redeployed these funds in various plays such as Colorado and Just Group, but the same parcel of Coles shares would be worth $1.38 billion if he’d hung on and sold them last night along with the parcel held by Premier Investments.

Solly has Victorian taxpayers to thank for this stake because failed merchant bank Tricontinental lent Solly virtually 100 per cent of the money when he made that first fortuitous $32 million investment for a 10 per cent  stake in Myer way back in 1983.

Solly had lifted it to 13 per cent by the time he helped engineer the big merger with Coles a couple of years later , a merger that history shows was far more favourable for the Myer shareholders.

BRW will almost certainly declare Solly to be a billionaire for the first time in a few weeks and that will be due almost entirely to his 23-year rollercoaster ride with Coles Myer. Most billionaires build their fortunes in companies they own and run, but Solly is one of the few who has done it simply by investing in another company.