Coles proxy votes strongly back sale to Australia's Wesfarmers

  • Business
  • Wednesday, 07 Nov 2007

MELBOURNE (AP) - Proxy voters gave their initial support Wednesday for a 19 billion Australian dollar (US$17 billion; euro11.69 billion) bid for retailer Coles Group Ltd. by conglomerate Wesfarmers Ltd. - the largest takeover in Australian history. 

Coles Group Chairman Rick Allert said in a statement that the total number of proxy votes comprises 695.5 million votes for, and 5.4 million votes against, the proposal. 

Allert said he also holds 27.4 million "open'' votes, which he intends to vote in favor of the scheme at a shareholder meeting later Wednesday, when the final poll results will be released. 

The initial results pave the way for the country's biggest takeover. 

"I can only reiterate that the board is unanimous in the view that the sale of this great Australian company, Coles, to another great Australian company, Wesfarmers, is in the best interests of all of our shareholders,'' Allert said in a statement.  

"We therefore urge you to vote in favor of the scheme.'' 

The Perth-based Wesfarmers requires approval from 75 percent of Coles' shareholders in terms of value and 50 percent by number at the meeting to approve the deal. 

A court hearing to ratify the decision is set for Nov. 23. 

Shareholder approval was largely expected, with Coles shareholders given little alternative.  

Wesfarmers emerged as the sole bidder for the whole company in July after the global credit squeeze prompted rival buyout firms to walk away. 

The sale was sparked in August 2006 by an unsolicited approach from a consortium led by U.S. buyout firm Kohlberg Kravis Roberts & Co. 

Coles rebuffed two offers from KKR, but after a profit downgrade in February, elected to put the business up for sale. 

The final sale price will depend on the average price of shares over the next five days from the date the scheme of arrangement becomes effective. Wesfarmers' offer was 75 percent equity based. 

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