$2bn Coles Shares Bought By Raiders
The Age
Tuesday April 3, 2007
A DRAMATIC raid last night on shares in retailing giant Coles by the owners of hardware group Bunnings and Macquarie Bank, heralded the start of a $20 billion takeover battle.
Macquarie, in tandem with Bunnings' parent Wesfarmers, Private Equity Partners and British private equity group Permira, kicked off their gambit last night by calling major shareholders and asking them to sell. It is now believed to speak for more than 10 per cent of Coles shares, or $2 billion worth. The consortium is believed to have agreements that would hand it 14.9 per cent of Coles..It is believed agitating Coles shareholder, and former chairman, Solomon Lew has sold his entire stake in the company to the consortium at $16.47 a share - valuing Coles at $19.7 billion.Mr Lew, who has been sniping from the sidelines ever since he was kicked off the Coles board about four years ago is understood to have signed over the near 6 per cent of Coles owned by his stock exchange-listed investment company, Premier Investments. A $20 billion plus full takeover for Coles, owner of Target and Kmart as well as its huge supermarket and liquor chains, now appears to be on the cards - Australia's biggest ever takeover.For shareholders, that would be far sweeter than the $18 billion offered late last year by a private equity consortium led by the rapacious Kohlberg Kravis Roberts.About 42 million Coles shares were traded after the market's close in a special crossing last night, including two separate parcels of 21 million and 17 million. On a normal day, only about 3 to 4 million shares are traded in the retailer.Wesfarmers' move could rescue Coles' beleaguered managing director John Fletcher who has been scorned by investors for failing in a last-ditch bid to turn the ailing retailer around. Mr Fletcher and the Coles board put the company up for sale last month after admitting there was no way it was going to meet aggressive profit forecasts. This was expected to result in a break-up of the group. Last night's move appeared to catch Coles unawares.
© 2007 The Age
