Shareholders will be the beneficiaries of Woolworths Group selling five per cent of its stake in Endeavour Group. The block trade, at $5.22 per share, will raise $468 million, with Woolworths saying the proceeds would be returned to shareholders. The sale will reduce Woolworths' shareholding in Endeavour to 4.1 per cent.
Woolworths said it was committed to holding onto its remaining shares for at least 60 calendar days.
CEO Brad Banducci said, “We have no intention to sell the remaining stake but will continue to assess what we believe is in the best interests of shareholders.”
He said the companies would remain important business partners and have several long-term partnership agreements.
“We no longer believe that a material equity investment in Endeavour Group is required as the group approaches its three-year anniversary as an independent listed company,” he said.
Woolworths flagged its plan to merge Endeavour Drinks and ALH Group and then demerge the company from Woolworths in 2019. Covid put the brakes on that, with the plan not implemented until 2021.
At the end of last year, Woolies reviewed its 9.1 per cent stake in Endeavour in terms of the level of influence it had over the hotels, alcohol, and gaming operator, and decided it no longer had significant influence.
As a result, its investment in Endeavour would be recorded as a financial asset instead of an equity accounted investment. The impact of the accounting change is a loss of $209 million.
