COLES SHARES’ FRESH OFFER

GROCERY group Coles has emerged as a $ 17 billion company after being spun out of retail and resources conglomerate Wesfarmers.

The retailer’s shares joined the Australian Securities Exchange at an opening price of $ 12.49 yesterday. They closed 2.1 per cent higher at $ 12.75, giving the company a market value of $ 17.01 billion.

It means Coles is now Australia’s 20th biggest listed company, sitting just behind miner South32 and insurance and banking group Suncorp. Coles, Australia’s second biggest grocer, has 1.33 billion shares on issue.

It marks a return to the stockmarket by Coles as a stand- alone company for the first time since it was fused with Myer to form Coles Myer in the mid 1980s.

Shares in Wesfarmers, which has kept a 15 per cent stake in the grocer, fell 27.7 per cent in the wake of the demerger, to $ 31.96.

All eligible Wesfarmers shareholders received one Coles share for every Wesfarmers shares they held.

Coles shares were expected to trade somewhere between the low of $ 11 predicted by analysts at investment bank Morgan Stanley and Citibank’s tip of more than $ 14 a share.

Coles chair James Graham said the company was “pleased to be joining the ASX under our own name”.

“Listing Coles on the ASX as a stand- alone business marks the next phase in the evolution of a company that began as a single store in Collingwood 104 years ago,” he said.

“I speak for the entire board when I say it is an immense privilege to be with Coles for such a milestone, and we thank our 480,000- plus new shareholders for joining us on this journey.”