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Wesfarmers Coles sell-off

Wesfarmers are set to sell off a 4.9% stake in Coles Group.

The sale would net the West Australian based company $1.05 billion, and equate to $16.08 per share.

The sale is expected to be finalised tomorrow and Wesfarmers have stated they anticipate a (pre-tax) profit of $160 million.

They will continue to hold a 10 per cent share in Coles and retain board nomination rights, which was a condition of the demerger of Coles from Wesfarmers in 2018.

The announcement came on the same day as Coles released their half yearly results and news that the supermarket giant had underpaid staff by up to $20 million over a six year period.

In a statement on the sale, Wesfarmers managing director Rob Scott said it would allow both companies to pursue ‘mutually beneficial growth initiatives’.

“We believe this level of divestment is in the best interests of our shareholders and consistent with our objectives at the time of the demerger, which included demonstrating continued confidence in Coles’ future as a stand-alone listed company,” Mr Scott said.

“We have been pleased with the performance of Coles as an independently listed entity and believe it is an appropriate time to realise value for our shareholders while retaining a meaningful interest and ongoing connection with Coles, including representation on its Board and through our flybuys joint venture.”

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