Wesfarmers Ltd [ASXWES] shares are trading at 49.06, having fallen 0.88% at time of writing.
Wesfarmers is Australia’s largest private sector company. In 2007 they purchased Coles along with Officeworks, Target and Kmart for $22 billion.
However Wesfarmers have recently proposed a demerger with Coles.
Wesfarmers demerger details ahead of November
The WA-based group has released more details of its proposed demerger. Which is set to make Coles a separate company by the end of November, with Wesfarmers confirming it will keep a 15% stake in Coles and a 50% ownership of its Flybuys loyalty program.
Despite this, it’s a major shake-up for the group. Considering it was only in May that Wesfarmers exited its failing Bunnings business in the UK and Ireland, and after its poor purchase of UK’s hardware branch Homebase.
This most likely played a part in its falling share price.
Wesfarmers director to lead new Coles board
James Graham has been a director of Wesfarmers for more than 20 years. Yet, Wesfarmers has appointed Mr. Graham to lead the Coles board if or when the demerger is approved.
He is also a partner and chairman of corporate advisory Gresham, which is one of the several advisors working on the Coles demerger. Wesfarmers also owns 50% of Gresham.
When asked by analysts and media Rob Scott, Wesfarmers managing director, said ‘there is no direct nexus between Coles and Gresham.’
‘It’s ultimately up to the Coles directors to determine if directors are independent but we don’t see that a minority shareholding in Coles that doesn’t provide any degree of control should create an independence issue.’
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