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MELBOURNE - Wesfarmers' A$20 billion ($24 billion) offer for supermarket chain Coles Group, Australia's largest corporate takeover, is set to sail through a shareholders' vote tomorrow, sources say.
Wesfarmers and Coles are confident of getting the deal approved, according to the latest tally of proxy votes that had to be lodged yesterday, the sources said.
Coles shareholders are due to vote on the deal at a meeting tomorrow, bringing to a close a 15-month saga for control of the country's second-largest retailer.
Proxy votes are running strongly in favour of the Wesfarmers takeover, one source said.
More than 75 per cent of Coles shareholders must vote in favour for conglomerate Wesfarmers to take control.
Retail shareholders are expected to follow the board's recommendation in favour of the takeover.
Of Coles' 350,000 shareholders, about 256,000 own 1000 shares or less, and another 83,000 own between 1000 and 5000 shares.
Wesfarmers, which runs Australia's largest hardware chain Bunnings, faces an uphill task to overhaul the supermarkets, where sales have stalled and Coles has lost significant market share to Woolworths.
Scepticism about Wesfarmers' ability to turn around the business contributed to a slide in its share price from July that threatened to undermine the value of the bid, which is 75 per cent scrip-based.
But a 16 per cent rally in Wesfarmers' share price from an August low has restored confidence in the deal getting through.
The increase has been largely attributed to a surge in coal prices, boosting the prospects for Wesfarmers' coal division.
The recovery in the shares prompted the independent expert, Graeme Samuel and Associates, to upgrade its assessment, saying the Wesfarmers offer was now reason-able.
The Myer family, which holds about 4 per cent of Coles, has said it will vote in favour of the deal.
- Reuters
