A protracted bidding war for Australian retailer Coles Group Ltd. closed on Saturday, with conglomerate Wesfarmers Ltd. presenting a bid that could be worth up to A$19.7 billion ($16.7 billion) for the whole company.
The deal would be the biggest takeover in Australian corporate history. Wesfarmers' was expected to be the only bid for the whole company.
Woolworths Ltd., Australia's top supermarket chain, was also expected to have made an offer by the deadline of 9 a.m. on Saturday (2300 GMT Friday) for two Coles' units, office supplies retailer Officeworks and either of the discount chains Target or Kmart.
Woolworths cannot bid for Coles' core supermarkets business because of competition issues.
We have lodged an all-of-company proposal, a Wesfarmers spokesman told Reuters on Saturday, declining to elaborate on details.
Wesfarmers has said in the past that its offer for Coles was worth an indicative A$16.47, but that this was subject to due diligence. A bid at this price would value Coles at A$19.7 billion.
A spokesman for Coles confirmed that the group had received proposals on Saturday.
The board has received and commenced its consideration of proposals relating to the ownership of the company, Coles spokesman Scott Whiffin said.
Woolworths could not be reached for comment.
A private equity consortium led by TPG pulled out of the sale process on Thursday, dashing Coles' hopes for a competitive auction. Coles had put itself up for sale in February after poor performance in its core food and liquor business.
Wesfarmers, which holds a 12.8 percent stake in Coles, is expected to have made a cash and scrip offer. It has said it may increase the scrip portion to make it more attractive to retail shareholders, who will receive capital gains tax relief.
Australian newspapers on Saturday reported that Wesfarmers was expected to pitch its bid low.
Coles should consider itself lucky if it gets an offer as high as the A$16.47 price paid by Wesfarmers for its 13 percent stake in April, the Sydney Morning Herald said.
If Coles perceives the offer to be inadequate and rebuffs Wesfarmers, it will be forced to revert to Plan B, which involves breaking up the company and selling the divisions, it said.
The Australian newspaper said the performance of Coles supermarkets was deteriorating further by the week, and described the bidding process as a war of nerves.
A bid of at least A$17.25 a share, as offered by Wesfarmers to institutional shareholders in May in a bid to lift its stake in the target company, would win immediate acceptance, the newspaper said.
Wesfarmers is bidding as part of a consortium which includes Macquarie Bank Ltd. and private equity funds Pacific Equity Partners and Permira.
Coles' board will consider the two offers as part of its ownership review process but has not indicated a timeframe for its decision.
Sources close to the situation have said that Coles does not favor the option of breaking the company up for sale.