A shareholder vote to determine whether Woolworths Group is able to uncouple itself from hospitality business Endeavour Group is set to take place on June 18.
First proposed in July 2019, the demerger is backed by Woolies’ board and leadership team, who believe it is likely to grow shareholder value in the long run.
“It will create two leading ASX-listed companies,” Woolworths Group chairman Gordon Cairns said.
“We believe both businesses, post demerger, have strong future prospects and will benefit from greater simplicity, focus and ongoing partnership.”
According to the board, following the demerger Woolworths Group will remain one of Australia and New Zealand’s leading food and everyday needs businesses, while the then-independent Endeavour Group will become Australia’s leading retail drinks and hospitality business.
“The demerger is intended to enable Endeavour Group to realise its full potential with a clear purpose across retail, hotels and it’s broader business,” Woolworths Group said in a release to its shareholders.
“Post demerger, Endeavour Group will have an independent business strategy and a broad mandate for growth with capacity and access to capital to pursue a range of investment and growth initiatives.”
Unsurprisingly, Woolworths Group’s board unanimously recommended shareholders vote in favour of the demerger at the upcoming meeting – which due to Covid-19 uncertainty will be primarily held online.
Shareholders will retain all existing shares in Woolworths, while also gaining one share in Endeavour Group for every share they held in the combined company.
Leadership team revealed
Cairns also announced that the proposed Endeavour Group would welcome Holly Kramer of Woolworths, Bruce Mathieson Sr of Bruce Mathieson Group, as well as Duncan Makeig, Joe Pollard, Colin Storrie and Catherine West as non-executive directors-elect.
These directors will join Chairman-elect Peter Hearl and Endeavour Group CEO Steve Donohue in leading the divested business.
“I look forward to working with the directors-elect at this exciting time for Endeavour Group,” Cairns said.
“The board includes a wealth of local and international experience, a diverse mix of backgrounds and complementary skills across fast moving consumer goods, hospitality, marketing, digital and technology, finance and strategy.”