Wesfarmers likely to offload BWP Trust
As the Coles demerger progresses, Wesfarmers is believed to be running the ruler over the rest of its portfolio and its $400 million stake in BWP Trust could be on the chopping block.
The WA conglomerate owns a 25 per cent stake in BWP, which is the largest owner of Bunnings warehouses in Australia with a portfolio of 79 properties.
The portfolio is worth $2.3 billion, collects $153.2m in annual rent and has a weighted average lease expiry of 4.8 years.
Wesfarmer’s stake in the trust has been a steady income generator for the company but given the company is paring back the number of businesses it owns, there is speculation that BWP could go.
Sources yesterday said Wesfarmers shouldn’t find it difficult to offload the stake and a scan on BWP’s registry shows some major names on the list.
After Wesfarmers, Vanguard is the second largest shareholder with a 6 per cent stake and it is then followed by Legg Mason, Blackrock, State Street and Netwealth, the Australian wealth management company.
In Australia, Bunnings will remain in the Wesfarmers portfolio but the British business is also in line to be sold.
Wesfarmers has Lazard trying to find a buyer for the business, which has been beset by underperforming expectations. Its predicted the business will not break even until 2022 and could incur hundreds of millions more in losses before then.
Elsewhere, investment banks JPMorgan and Citi were selling a 5 per cent stake in Evolution Mining on behalf of major shareholder La Mancha last night.
On offer was 84.6 million securities at a floor price of $3.19, which is a 5 per cent discount to the company’s last closing share price.
It leaves La Mancha with a 15 per cent interest in the company.
It follows Evolution’s deal with La Mancha in 2015 to buy all of its Australian operations, increasing the group’s gold production. As part of the agreement, La Mancha was to become the largest shareholder and long-term strategic partner.
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