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Australia's Coles Group is likely to have a long list of potential buyers for its business, but private equity players may not want to pay much more than the A$18 billion ($20.4 billion) the retailer knocked back last year, analysts said.
Various private equity firms and other retailers are likely to be interested in Coles as a whole or in some of its businesses. Australia's second-largest retailer put itself up for sale on Friday after receiving a number of informal approaches.
Analysts said private-equity firms were seen as the most logical buyers of Coles because of their greater access to leverage than industry buyers.
But because they demanded high returns, private equity firms might not be prepared to pay more than A$16 a share, which would value the company at around A$19 billion, compared with the A$15.25 a share offer that Coles rejected last year.
Coles shares ended yesterday at A$15.68.
- REUTERS
