It is being reported that Wesfarmers Ltd (ASX: WES) may have just sold $500 million of Coles Group Ltd (ASX: COL) shares.
It used to own the entire Coles business. But it has been steadily selling down that holding.
Wesfarmers sells more Coles shares?
According to reporting by the Australian Financial Review, Wesfarmers was selling $500 million of Coles shares on Tuesday night.
The sale reportedly involved 28.2 million sales, representing just over 2% of Coles’ shares on issue.
What price did the company manage to get for its Coles shares? According to the reporting, Wesfarmers managed to get a price of $17.75 a share. This represented a discount of around 1.8% to the closing price. Previous sales have been done at shares prices of $16.08 and $15.39.
According to the AFR, this sale was reportedly triggered by Barrenjoey Capital. It managed to convince Wesfarmers to sell the shares in less than an hour after the market had closed.
There is an assumption that Wesfarmers still owns around 30 million shares of Coles, so it may be interested in selling that final lump of shares.
What to make of this sale?
The Coles share price is close to a 6-month high, so it’s not surprising that Wesfarmers was looking to sell shares at this higher level.
I wouldn’t be worried if I were a Coles shareholder. Wesfarmers has been selling down shares for a long time. The latest sale seems just to be taking advantage of the higher price.
The more interesting question is – what will Wesfarmers do with the money? Is it improving its balance sheet? Is it using this money to pay for the Australian Pharmaceutical Industries deal? Could it be thinking about other acquisitions? I’d be pleased to see Wesfarmers expand into other areas.
Summary thoughts
I think Wesfarmers is one of the best ASX blue chips around. Another investment into a new area could be really positive for the business. Time will tell what the company does with the money.
However, there are other ASX dividend shares I prefer the look of more.
