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SYDNEY - A private equity consortium bidding for Australian retailer Coles Group Ltd is set to walk away from the deal, a source said today, leaving a A$19.7 billion ($22.1 billion) offer from conglomerate Wesfarmers Ltd as the only one on the table.
The consortium, led by private equity firm Texas Pacific Group, was set to pull out after talks with retailer Woolworths Ltd over a joint bid broke down, the source said.
"It's very likely they will withdraw," the source said.
The other partners in the consortium were Blackstone Group and Carlyle Group. Three other members of the original consortium of six, including Kohlberg Kravis Roberts, pulled out in late May.
A spokeswoman for the private equity consortium could not confirm the decision to withdraw.
The private equity consortium had been considering a link-up with Woolworths, Australia's largest supermarket chain, which is interested in some of Coles' businesses but would not be able to buy its supermarket or liquor businesses due to competition concerns.
The private equity consortium would need a listed partner such as Woolworths to be able to offer scrip and hence capital gains tax relief, to match an advantage already held by Wesfarmers and its private equity partners Pacific Equity Partners, Permira and Macquarie Bank Ltd.
Coles put itself up for sale in February after struggling in its core business and losing market share.
- REUTERS
