Farmers could be thinking that while Wesfarmers has offloaded all its rural interests ‹ apart from the CSBP fertiliser busi-ness ‹ surely it still had a soft spot for the WA bush and those in it.
All beef producers across the state would love to see Wesfar-mers start stocking WA stores with locally grown produce.
The fact Coles hasn¹t been selling local beef in its WA stores has long been a sore point for WA cattle farmers and while there is a long way to go before this deal is signed, they would certainly welcome this change if Wesfarmers gets a hold of the retailer.
Since its first raid on Coles shares ‹ acquiring an 11.3pc holding in the company ‹Wesfarmers has gained another 1.5pc to bring its holding to 12.8pc.
If the acquisition is successful, Wesfarmers intends to restruc-ture the company along the following lines:
p Coles Everyday Needs businesses, which are food, liquor, general merchandise (K Mart), would be owned by Wesfarmers and its consortium partners Pacific Equity Partners, Permira and Macquarie Bank.
Wesfarmers would hold about 50pc of the Everyday Needs businesses, which would be majority Australian-owned and structured with typical private equity characteristics
p Wesfarmers would own Officeworks and Target outright.
Wesfarmers managing director Richard Goyder said the company and its consortium partners brought a combination of financial experience and expertise in successfully growing Australian businesses, including those in the retail sector.
³Our Bunnings business is Australia¹s third largest retailer,² Mr Goyder said.
³It has a network of more than 210 stores and over 24,000 employees across Australia and New Zealand.
³Sales this year are on track to exceed $4.6 billion and 2006 earnings before interest and tax were $420.5 million.
³We believe the acquisition of Coles would be a very positive step for the shareholders of both companies.
³There is a real opportunity to enhance these significant Aus-tralian businesses to the benefit of both sets of investors and to Coles¹ customers, employees and suppliers.²
Coles Group chairman Rick Allert said the Wesfarmers¹ proposal, if implemented, would be by way of a scheme of arrangement that would allow shareholders to choose between an all cash offer and a mix of cash and Wesfarmers¹ scrip.
Mr Allert said Wesfarmers had described its proposal as non-binding, indicative, incomplete and as expressing its current intentions only.
The Wesfarmers proposal was also submitted on the basis of immediate commencement of due diligence.
Mr Allert said Coles Group would now enter into discussions with Wesfarmers with a view to agreeing an accelerated timetable for due diligence.
³Wesfarmers¹ proposal for the whole of the company reinforces our view that we have a set of unique and very valuable businesses in the Coles Group,² he said.
p Coles Group released a statement on Tuesday saying Wesfarmers¹ initial bid had been rejected, but Mr Goyder said the company was still firmly in the race to secure the retailer. It is believed that private equity group Kohlberg Kravis Roberts, which made an offer to the retailer late last year, are keen to make a counter offer to Coles.