According to local reports, the CEO-designate of Australia’s largest retailer, Michael Luscombe, told a private lunch held in Sydney yesterday (14 September) that a second bid for Coles Myer was believed to be “on the way”, adding that Woolworths would be interested in joining the carve-up.
According to a report in the Sydney Herald, Luscombe was hosting a lunch for suppliers and executives of Big W general merchandise chain when he made the extraordinary offer.
Responding to questions from those in attendance, Luscombe reportedly revealed that the Woolworths board believed that US investment bank JP Morgan was putting together a consortium to bid for Coles Myer at between A$16.50 (US$12.40) and A$17.50 per share.
Luscombe continued that if the company were to be broken up, Woolworths would be interested in buying one of the parts. The Woolworths CEO did not specify which of Coles Myer’s businesses they were interested in, but market commentators have suggested that it is likely eying Target or Officeworks as they each fit a gap in Woolworths portfolio.
However, the likelihood of Australia’s competition tsar Graeme Samuel approving such a move seems questionable.
Coles Myer rejected a bid of A$14.50 last week.
Shares in the retailer increased 1.25% to close at A$14.64.