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Mon, Apr 09, 2007 - Page 10 News List

Wesfarmers won't sell assets to help Coles takeover bid


Wesfarmers said yesterday that it had no plans to sell off any businesses to fund its bid for Australian conglomerate second-largest retailer Coles.

Wesfarmers Ltd is spearheading a A$19.7 billion (US$16.1 billion) bid for Coles Group Ltd which, if successful, would be one of the biggest takeovers in Australian corporate history.

The company, a leader in home improvement and building supplies, last week led a share raid on Coles which netted more than 11 percent of its stock.

Chief executive Richard Goyder said the company would not divest itself of other businesses such as coal or fertilizer to fund the proposed Coles purchase.

"We're a diversified business and proud of it, and it has been one of the great strengths of Wesfarmers over time," Goyder told Sky News.

"We don't need to sell any assets to finance this deal and we look forward to all businesses at Wesfarmers contributing to our future growth," he said.

Goyder said Wesfarmers had made a compelling offer for the retailer which includes supermarkets, liquor stores, an office supply chain and budget department stores Target and Kmart.

"It delivers outstanding value to Coles shareholders," he said.

"We don't require any regulatory approvals ... we can get an offer to their shareholders in good time," he said.

Wesfarmers is part of a consortium with investment bank Macquarie Bank, local private outfit Pacific Equity Partners and Europe's Permira to launch a bid worth more than A$2 billion to snare Coles.

The offer comes after Coles rebuffed a bid from US firm Kohlberg Kravis Roberts (KKR).

KKR's proposal of A$15.25 per share was rejected as significantly below the company's true value.

Wesfarmers has offered A$16.47 cash per Coles share.

Coles announced in February it wanted a competitive auction of its assets after it said it would not achieve its profit target for next year.

Key shareholder Hedley Group, a property developer and construction company which holds a 1.5 percent stake in Coles Group, said it would support the Wesfarmers offer.

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