Private equity firm Bain Capital has reportedly joined a consortium of investors led by Kohlberg Kravis Roberts (KKR) as they prepare to make a move on Australia’s second largest supermarket chain Coles.
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With the addition of Bain, the KKR consortium is believed to consist of six members. The group also includes the Caryle Group, CVC, Texas Pacific Group and Blackstone Group.
Coles, who rejected an A$18bn (US$14bn) offer last year, put itself on the block last month when it said that it would consider offers either for a total sale or break-up of the company. It is believed that the retailer is hoping to limit the size of consortiums in order to increase competition among bidders. However, according to a Reuters report KKR is resisting the imposition of any such restriction.
“There is a real problem with its [Coles] attempts to limit the numbers and it may well knock out the consortium because they have to do it with the six members that are being discussed,” an unnamed source close to the situation was quoted as saying. “All of those people have access to the KKR model and how they will structure the transaction and what they will do with Coles if they bought it.”
Bain had previously been working with Pacific Equity Partners to look at Coles. However, the two groups are believed to have disagreed over valuation.
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