The Coles sale process continues to attract considerable public interest. The Australian Competition and Consumer Commission (ACCC) has been keeping a watchful eye on the process, particularly private equity ‘lock-ups’.
Last month, after Wesfarmers Ltd secured an 11.3 per cent stake in Coles, it advised the Coles board that it intended to make a $16.47 a share full cash offer (with a scrip alternative). Rival, Woolworths, has also expressed an interest, with Coles’ general and office merchandise businesses clear targets.
Potential competition concerns are raised by private equity ‘lock-ups’ which involve the formation of large consortiums ‘locking up’ all or the majority of potential bidders.
The ACCC maintains a watchful eye on this issue and is reported to have been in close discussions with the US Department of Justice (the equivalent competition regulator), which is also increasingly concerned with the ‘locking-up’ of suitors. As yet, the ACCC has not publicly commented on how it intends to deal with this issue.
More information
For information regarding possible implications for your business, contact a member of the Competition & Market Regulation team.