Woolworths to sell off $468 million stake in Endeavour Group

In a transaction outlined in an ASX post this morning, Woolworths Group has announced it will be selling off 5% of its 9.1% stake in Endeavour Group. 

The transaction will take place via a block trade at a price of $5.22 per share and follows on from Woolworths Group’s recent adjustment to its Endeavour Group investment earlier this year.

Woolworths Group is expected to use its profits to return capital to shareholders.

"While Woolworths Group and Endeavour Group remain important business partners, with a number of long term partnership agreements in place, we no longer believe that a material equity investment in Endeavour Group is required as Endeavour Group approaches its three-year anniversary as an independent listed company,” said Brad Banducci, CEO at Woolworths Group. 

"As a result, we have decided to reduce our stake below 5% with the intention to use the proceeds to return capital to shareholders. 

After the sale, Woolworths Group’s stake in Endeavour Group will be approximately 4.1%. Standard practice means Woolworth’s Group has committed to retaining its remaining Endeavour shares for at least 60 days. 

“We currently have no intention to sell the remaining stake, but will continue to assess what we believe is in the best interests of Woolworths Group shareholders," said Banducci.

Woolworths Group has been progressively devaluing its stake in Endeavour Group ever since the drinks business parted ways from the supermarket group in 2021. In January this year, Woolworths lost over $200 million after “[derecognising] its equity accounted investment in Endeavour Group and [recognising] an investment in Endeavour Group as a financial asset, measured at fair value.” 

The news also follows a very public quarrel over Endeavour Group’s leadership and performance, which ended in a campaign by major shareholder Bruce Mathieson to have then-chairman Peter Hearl removed. The quarrel terminated with both Hearl and Mathieson’s son stepping down from their positions on the company board, with Ari Mervis and Peter Margin assuming the vacated positions from the end of March.