Coles Proxy Votes Back $18.2 Billion Wesfarmers Bid
Conglomerate Wesfarmers moved closer to securing a A$19.6 billion (US$18.2 billion) takeover of retailer Coles Group on Wednesday, after a majority of proxy votes backed Australia's largest corporate takeover.
Coles said proxy votes by shareholders were 696 million in favor of the deal and 5.4 million against, as an end neared to a 15-month saga over control of the country's second-largest supermarket chain.
Shareholders were meeting Wednesday to vote on the takeover which will create Australia's largest retailer with revenues of A$44 billion, and the largest private-sector employer with some 200,000 workers.
Coles Chairman Rick Allert announced the proxy votes -- postal votes sent in by shareholders unable to attend the meeting -- in a speech released to the Australian Stock Exchange. He said he also held 27.4 million open votes which he would vote in favor of the bid.
Coles shares rose 1.2 percent to A$15.90 in the morning session Wednesday, while Wesfarmers stock added 1.2 percent to A$43.00.
Wesfarmers, which runs Australia's largest hardware chain Bunnings, faces an uphill task to overhaul Coles' supermarkets, where sales have stalled and Coles has lost significant market share to larger rival Woolworths.
Both companies date back to 1914, when George Coles opened a variety store in Melbourne and Wesfarmers began as a farmers' cooperative in Western Australia.
Coles put itself up for sale in February after a poor performance and after downgrading its profit forecasts. Last year it rejected two takeover offers by private equity firm Kohlberg Kravis Roberts.
Wesfarmers proceeded with a solo bid in June, after its private-equity partners dropped out as the cost of debt soared after the U.S. subprime meltdown. It was also the only bidder after a rival private equity consortium pulled out.
The takeover, which has already received regulatory approval, is due to take effect on Nov. 23.