Wesfarmers Limited (ASX: WES) is set to shrug off Coles

Wesfarmers Heading-on with Amazon on Delivery Formats

Wesfarmers resumed trading after the release of pending announcement on demerger of Coles Group Limited and the associated disclosures.

The consumer sector company Wesfarmers Limited underway to shrug off its supermarket unit Coles. The company announced that it intends to hold a shareholders meeting on the order of Supreme Court of Western Australia to obtain vote on the proposed demerger of Coles.

If the demerger goes through, the eligible shareholders are said to receive one share of Coles for every Wesfarmers share held at the demerger record date, which are also expected to be eligible for tax relief. Both the Scheme Meeting and General Meeting of Wesfarmers are scheduled to be held on 15 November 2018, with demerger expected to be completed in November this year.

The Board of Directors of Wesfarmers Limited have placed their unanimous recommendation that shareholders should vote in favor of the proposed demerger resolutions as independent expert, Grant Samuel & Associates, concluded that the demerger is in the best interest of the Wesfarmers shareholders.

On the separation from Wesfarmers after 11 years, Coles will become an independent listed company on Australian Securities Exchange. It will be new in a row to top-30 ASX listed supermarket retailer with leading positions in fresh food, liquor, groceries, and convenience. Coles has secured committed bank facilities of approximately $4.0 billion, to fund support net debt of circa $2.0 billion at demerger.

“Coles will be demerged with a strong balance sheet, including a net debt level that supports strong investment grade credit ratings,” Wesfarmers Managing Director Robert Scott said.

The demerger is said to be affected by way of a scheme of arrangement and a reduction of Wesfarmers’ share capital. It should be noted that post demerger minority ownership of Coles is expected to be retained by Wesfarmers which includes the interest of 15% in Coles and 50% in the flybuys joint venture with Coles. [optin-monster-shortcode id=”wxhmli4jjedneglg1trq”]

Mr. Scott stated that the demerger of Coles represents a significant repositioning of the Group’s portfolio which would position Wesfarmers for success over the next decade.

Robert Scott led company Wesfarmers Limited also announced today that Coles has entered into a Head of Agreement with the Australian subsidiary of Witron Logistik + Informatik GmbH, Witron Australia to develop two new automated ambient distribution centres for Coles over a five-year period.

Coles expects to deliver a dividend payout ratio ranging between 80% and 90% regarding franking credits, current cash flows and earnings, and future cash flow requirements.

Dividend Stocks To Buy

The Income available from dividends remains attractive for many investors.

We take a look at the best yields on the market and assess what they say about a company’s prospect.

One Thing is certain, though, Australia interest rates are still low, making income difficult to come by and keeping the focus for many investors on high yielding stocks. Kalkine’s team of analysts bought you handpicked report for “Top 25 Dividend Stocks For 2018.”

ASX-relevant Special Reports are published year-round to provide a detailed analysis into an investing opportunity or a potential risk to your portfolio.

Click here to get your free report.


Disclaimer

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.

Checkout our Free Dividend Stocks Report

Specially made for income-hungry investors, Invest in growing Franked Dividends an opportunity that should not be missed.


6 Cannabis Stocks under Investor’s Limelight…

Cannabis companies that sell both medicinal weed and recreational pot. Marijuana stocks to look at. Marijuana mergers and acquisitions. Dispensary data analytics. Upcoming marijuana IPO’s Those phrases have become increasingly common as marijuana legalization spreads.

Global spending on legal cannabis is expected to grow 230% to $32 billion in 2020 as compared to $9.5 in 2017, according to Arcview Market Research and BDS Analytics. As of June 29, 2018 the United States Marijuana Index, despite a lot of uncertainty around regulations, has over the past 1 year gained 71.49%, as compared to about 12% gain seen by the S&P 500.

Click here for your FREE Report