A second consortium has tabled a bid for Australian retail giant Coles Group.
Go deeper with GlobalData
Coles, Australia’s second-largest supermarket group, said today (10 April) that a syndicate led by private equity group KKR would at least match an earlier offer from a group headed by industrial conglomerate Wesfarmers.
The KKR-led consortium, which also includes private equity groups Bain, CVC and Blackstone, has “indicated its confidence” that it would match the Wesfarmers bid of A$16.47 (US$13.59) a share, Coles chairman Rick Allert said. The Wesfarmers bid, which was tabled last week, values Coles at around A$19.7bn.
Allert said Coles would open its books once the company has signed confidentiality agreements with both groups.
He added: “The board welcomes the participation of another major consortium interested in a whole-of-company bid as contributing to a competitive ownership review process and therefore being in the best interest of shareholders.”
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataColes outlined plans for a possible sale of the company last month, indicating that it would consider bids for the entire company or offload its three divisions separately. The company runs a supermarket division, a discount chain, Target, and stationery unit Officeworks.
Coles decided to pursue a possible sale after it warned in February that its profits for fiscal 2008 were likely to fall by 10%.
Wesfarmers managing director Richard Goyder said the bid from his company’s consortium has “significant advantages” for shareholders. He said: “It is the only detailed and readily implementable proposition before the Coles board.”
Wesfarmers, which holds a 12.8% stake in Coles, heads a consortium that includes Australia’s Macquarie Bank and two private equity groups, Permira Holdings and Pacific Equity Partners. The Wesfarmers-led bid allows Coles shareholders to choose between an all-cash offer or a mix of cash and Wesfarmers scrip.
Goyder added: “The Wesfarmers’ consortium proposal also gives shareholders the chance to participate in the future growth of Coles.”
Reports in Australia have claimed that Tesco, the UK’s largest retailer, could also take an interest in the bidding for Coles. Officials at Tesco could not be reached for comment as just-food went to press.
