A vote in favour of the deal by 97.83 per cent of shareholders with 99.25 per cent of Wesfarmers’ stock ended a 15-month legal battle for control of Coles, which had twice rejected takeover offers from private equity groups.
Allens Arthur Robinson, which acted for Wesfarmers Ltd on its cash and share offer, said Coles had rejected offers from private equity groups led by Kohlberg Kravis Roberts & Co before an acquisition proposal was announced by Wesfarmers in April this year.
The firm’s advice for Wesfarmers included M&A work, finance, tax, competition law, IP, property, litigation and regulatory issues. Allens partner Ewan Crouch led the firm’s team, which included partner Andrew Pascoe, Tom Story, Fiona Crosbie and Jeremy Low.
Crouch said the deal was a challenging transaction, which significantly changed the corporate landscape in Australia. “This involved iconic Australian companies and the whole country was watching. This added a certain amount of pressure to the deal and an added dimension to consider when structuring the transaction,” he said.
In April this year, Lawyers Weekly reported that Allens advised Wesfarmers on the $19.6 billion offer for Coles by scheme of arrangement, the largest ever takeover offer in Australia. But at that time the Coles Group board rejected the offer, launching a competitive bid process for interested buyers of the business, which at the time was expected to lead to a full sell-off of the company or parts of it.
Wesfarmers had in April made its $16.47 per share bid together with a consortium including private equity houses Permira, Pacific Equity Partners and Macquarie Bank. Coles also rejected an increased offer of $15.25 a share from US private equity firm Kohlberg Kravis Roberts in October last year.
Wesfarmers already owns Bunnings, the biggest hardware chain in Australia and the third-largest retailer, and just prior to the bid acquired an 11.3 per cent stake in Coles Group.
“Wesfarmers has considerable retail experience in its own right through Bunnings … we believe that a change in ownership will provide a catalyst for an improvement in performance,” said Wesfarmers managing director Richard Goyder.
Newspaper reports said last week that Wesfarmers chief executive Richard Goyder has warned that while work on overhauling the ailing retailer had started, it would be some time before shoppers would notice any change in the 700 supermarkets nationawide.