Retailer enters battle for Coles
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A couple check their receipt after shopping at a Coles supermarket in Sydney, Australia. |
Wesfarmers paid A$16.47 a share, or 8 percent more than a KKR bid that Coles rejected in October. An offer at that price would be a record for an Australian takeover, valuing Melbourne-based Coles at A$19.7 billion ($16 billion).
Buying the retailer would give Perth-based Wesfarmers 2,999 supermarkets, discount stores and office supply outlets in an economy in its 16th year of expansion. Sales growth at Coles lags behind larger rival Woolworths Ltd, prompting last month's decision to seek a buyer because it can't meet profit forecasts.
The price paid for the stake by Wesfarmers was 2.2 percent more than Coles' closing price on Monday.
Shares of both companies were halted from trade, with an announcement expected later today, Coles said. Wesfarmers said in a separate statement yesterday it's seeking talks with the supermarket chain.
Wesfarmers operates Bunnings hardware stores and also has investments in insurance and coal mining. Yesterday's announcement comes less than two months after the company said first-half profit fell 12 percent.
Bloomberg News
(China Daily 04/04/2007 page16)
