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Two members of a consortium looking to make a bid for Australia’s Cole Group reportedly have withdrawn from the process, according to published reports. Both Kohlberg Kravis Roberts (KKR) and CVC Asia Pacific made the decision to abandon their roles in the consortium, which had not yet made an actual bid for Australia’s second largest retailer.

According to analysts, these developments seem to leave Westfarmers, Australia’s largest home improvement chain, in the driver’s seat in terms of acquiring Coles, which has put itself up for sale. Ironically, it was KKR that started the process less than a year ago by making an unsolicited and ultimately unsuccessful offer for Coles. While there was no sale at the time, it opened the door for speculation and eventually the reality that Coles’ ownership was unlikely to remain as it was.

The remaining four members of what was the KKR consortium are The Texas Pacific Group, Bain Capital, Blackstone Group and Carlyle Group; it appears, for the moment at least, that they remain interested in acquiring Coles. There has been speculation that Tesco and/or Wal-Mart might make a play for Coles, or that Woolworths – Australia’s largest retailer – might be interested in some of its assets. But none of those possibilities have been realized.

Coles is expected to be sold for upwards of $16 billion (US), though the pullouts by KKR and CVC have led some market analysts to suggest that due diligence by the companies may have revealed some financial realities about Coles’ operations that made it look less appetizing.

Coles has set June 25 as a deadline by which final bids much be submitted for the company.
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