Woolworths Group has confirmed that it will be selling off its remaining 4.1% stake in Endeavour Group three years after the two groups separated in 2021. The sale, which will take place via a block trade at a price of $5.23 per share, will generate $383 million for the supermarket group.
“Woolworths Group has agreed to sell its remaining shares in Endeavour Group,” the supermarket group told the ASX on Monday.
“Woolworths Group intends to use the proceeds to fund the acquisition of the remaining 35% in PFD Food Services Pty Limited.”
The sale marks the final step in Woolworth’s progressive five year devaluation of its stake in Endeavour, which saw it lose $200 million in January after “[derecognising] its equity accounted investment in Endeavour Group and [recognising] an investment in Endeavour Group as a financial asset, measured at fair value.”
This week’s news also follows on from a similar transaction performed in May that saw Woolworths Group sell off 5% of its then-9.1% stake in Endeavour Group. At the time, CEO Brad Banducci said that, “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.”
The previous sale of shares was performed just under one and half years prior in December 2022. This saw Woolworths sell 5.5% of its stake in Endeavour Group for a worth of $636 million. Following this, Banducci said Woolworths had “no intention to undertake a further selldown in the short to medium term.”
The decision falls just a few weeks behind Endeavour Group’s recently published end of year results, which fell below expectations.
“Endeavour Group’s F24 financial results demonstrate the resilience of our brands and businesses in response to challenging trading conditions, with both our Retail and Hotels segments delivering sales and EBIT growth in a softening consumer environment,” said Steve Donohue, CEO.
Similarly, Coles Liquor’s financial results also shone a light on the current tough market conditions.
Another factor that may have influenced Woolworths’ decision to exit Endeavour Group is the 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.
According to the Australian Financial Review’s Street Talk, the $383 million block trade was performed by Goldman Sachs on Friday night.
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