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- The Woolworths Group (WOW) is one step closer to parting ways with its liquor and hotels arm in a $10 billion demerger
- Drinks retailers Dan Murphy’s and BWS, as well as hotelier ALH Group, would form their own ASX-listed vehicle under the split
- Shareholders could receive up to $2 billion via special dividends if they back the demerger
- Under deal paperwork, slated for release today, investors would receive one new share in the Endeavour Group lister for every WOW share they currently hold
- Shareholders will consider the split at a general meeting on Friday, June 18
- Today’s news saw WOW shares rally 2.33 per cent to $40.34 per share
The group behind national grocer Woolworths (WOW) is one step closer to parting ways with its liquor and hotels arm in a $10 billion demerger.
The move could return as much as $2 billion to shareholders if they back the split, which would see drinks retailers Dan Murphy’s and BWS, as well as hotelier ALH Group, form their own ASX-listed vehicle.
Under the Woolworths banner, the Endeavour Group operates over 1630 liquor stores within its retail segment and manages over 332 hospitality venues across Australia. Last financial year, it reported $10.6 billion in sales and nearly $700 million in earnings on a pro-forma basis.
Woolworth’s demerger plan, which first surfaced nearly two years ago, was initially put on hold due to COVID-19. Today marks the first time documents detailing the split have been distributed to investors, who will consider the move at a general meeting on Friday, June 18.
“The Woolworths Group Board believes that a demerger of Endeavour Group will enhance shareholder value and it will create two leading ASX-listed companies,” WOW Chairman Gordon Cairns commented today.
“We believe both businesses, post demerger, have strong future prospects and will benefit from greater simplicity, focus and ongoing partnership.”
If the split goes ahead, the Woolworths Group will retain a 14.6 per cent stake in Endeavour, while its long-term joint venture partner will also hold an equal portion in the group.
Meanwhile, investors would receive one new share in the Endeavour Group lister for every WOW share they currently hold, in addition to retaining their existing stake in the Woolworths Group.
Today’s news saw WOW shares rally 2.33 per cent to $40.34 per share at 10:55 am AEST. The group sits just shy of a $50 billion market capitalisation.
