Coles Myer admits it is in ownership discussions

By James Wells

MELBOURNE: A sudden jump in the Coles Myer share price of over 12 per cent has been connected to speculation that the world’s biggest grocer – the UK-based Tesco chain – is considering a takeover offer for the Australian retailer.

A statement issued to the Australian Stock Exchange this afternoon titled ‘Ownership Discussions’ explained the approach that has been made to the company.

“Coles Myer said today that it had been approached on behalf of parties wishing to hold discussions regarding the company’s ownership,” the company said in it statement.

“In line with its fiduciary duties, the Board will consider any bona fide proposals which might be put to it by those parties.

“The Board and management are committed to an focused on implementing the company’s new strategic direction announced two weeks ago and are confident this will create significant value for shareholders.”

Coles Myer today also announced its fourth quarter results today reporting a 5.7 per cent increase in annual sales to $34.4 billion, with fourth-quarter sales rising 7.5 per cent, excluding the Myer department store chain, which it sold for $1.4 billion.

Kmart’s performance improved significantly in the quarter with an increase in sales of 6.9 per cent or 3.1 per cent like for like.

“Annual sales growth of 1.1 per cent was impacted by record fuel prices which reduced sales across the discount sector,” the company said.

“During the second half, Kmart’s improved product offer and enhanced marketing program produced very successful Mother’s Day, Stocktake and Toy Sale events.”

The Target business delivered a strong performance with a 4.3 per cent increase in sales or 2.0 per cent like for like. fourth quarter sales increased 5.9 per cent overall and comparative sales were up 3.5 per cent following a strong Mother’s Day.

“A continued focus on Target’s o-trend, great value and differentiated product is a key driver in continuing business momentum. New Product offerings and an accelerated store roll-out program will continue to help maintain growth for Target.”

Coles CEO John Fletcher recently announced that the Kmart and Bi-Lo brands will disappear over the next two years as all 2,200 supermarket, liquor, fuel, convenience and super store will be named Coles and feature a new logo and offer an “everyday needs” profile.

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