1:13 PM
After confirmation of the proposed demerger, investors will be asking: Do I retain my Woolworths shares and/or hold shares in the newly-formed Endeavour Group?
-Scope for both Endeavour Group and Woolworths to re-rate
-Potential return of $1.6bn-$2.0bn to shareholders
-Positive outcomes for demergers since the year 2000
By Mark Woodruff
As first announced in July 2019, Woolworths ((WOW)) has confirmed it will be proceeding with the demerger of Endeavour Group subject to shareholder approval at an Extraordinary General Meeting on June 18. If approved, the demerger will create two independent ASX-listed companies with Endeavour Group likely to be a top ASX50 company.
Woolworths (ASX:WOW) share price rises on Endeavour demerger update
James Mickleboro | May 10, 2021 10:14am |
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At the time of writing, the retail conglomerate’s shares are up 1.5% to $40.00.
Why is the Woolworths share price rising?
Investors have been buying the company’s shares following the release of an update on its Endeavour Group plans.
According to the release, the Woolworths board has determined that a demerger is likely to enhance shareholder value over time and is preferable to other available options.
The company notes that the proposed demerger is the final step in a process that involves the combination of Woolworths Group’s drinks and hospitality businesses to form Endeavour Group through a restructure of Endeavour Drinks and subsequent merger with ALH Group.
Woolworths share price: Where next as Demerger looms?
The Woolworths share price has drifted higher as the company closes in on demerging its drinks and hotels businesses.
Shane Walton | Financial Writer, Australia | Publication date: 2021-05-10T02:45:59+0100
Woolworths (ticker: WOW) on Monday announced that it had entered the third and final stage of its Endeavour Drinks transformation program.
Today’s announcement builds on a process started back in 2019, which started with the group’s drinks and hospitality businesses restructured to its own legal entity: Endeavour Group. The aim behind the demerger was always a simple one: Create a more focused, independent business that was/ will be well positioned for future growth.
Woolworths to return up to $2b if drinks split approved
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Woolworths plans to hand back as much as $2 billion if shareholders approve the $12 billion demerger of its drinks and hotels business and could return even more capital if the newly independent Endeavour Group is embraced by investors.
Woolworths chief executive Brad Banducci hopes the long-awaited demerger, which was proposed in July 2019 and postponed when venues had to close because of the pandemic, will be as successful as Wesfarmers’ demerger of Coles.
Endeavour CEO Steve Donohue and Woolworths’ CEO Brad Banducci.
Dallas Kilponen/Woolworths
The Coles demerger created more than $16 billion in value for shareholders and enabled Wesfarmers to subsequently sell two-thirds of its stake for more than $2 billion in less than 18 months.
Woolworths’ hotels and bottle shops spin-off Endeavour Drinks will make its first pitch to fund managers this week in a non-deal roadshow arranged by Jarden Australia and Citi.