KMART SELLING ITS HOLDING IN COLES MYER FOR $924M
TROY, Mich. — Kmart Corp. will sell its 21.5 percent stake in Coles Myer Ltd., Australia’s largest retailer, for roughly $924 million ($1.26 billion Australian).
The sale, announced Thursday, was not a surprise, since Kmart has been exploring ways to raise cash to continue refurbishing its discount stores and open more Super Kmart supercenters.
Last month, Kmart’s efforts to raise cash suffered a big blow when a targeted stock offering in its five subsidiaries was voted down by shareholders. That defeat made Coles Myer the most likely alternative.
The deal requires the approval of Coles Myer shareholders. A vote is scheduled for mid-September.
According to a Kmart statement, Coles Myer offered to purchase Kmart’s approximately 267 million share stake for $4.55 Australian per share, a premium over the $4.31 Australian closing price on July 20.
Coles Myer operates 150 Kmart locations and other stores in Australia and New Zealand.
As part of the transaction, Kmart will extend to the year 2018 its license that allows Coles Myer to use the Kmart name.
— Fairchild News Service