Australian retailer Woolworths exits Endeavor Group three years after spin-off By Reuters

By Sherin Sunny and Rishav Chatterjee

(Reuters) – Australian retailer Woolworths has decided to leave the owner of liquor store chain Dan Murphy’s and BWS bottle stores, ending its long-standing relationship with Endeavor Group, about three years after it axed it.

Australia’s biggest supermarket chain said on Monday it had agreed to sell its remaining 4.1 per cent stake in the liquor store and pub operator in a block deal at a price of $5.23 each, to generate US$383 million ($258.75 million).

Woolworths, also known as Woolies, in 2019 merged its hospitality and liquor operations into one company, then called Endeavor Drinks, which was demerged with Woolworths holding an 85% stake.

The supermarket chain has gradually diluted its stake in Endeavor over the past five years. It sold a $636 million stake in the hospitality operator in 2022 in what it said was a transition from owning Endeavor to becoming partners.

In May, Woolworths sold another 5% stake worth $468 million.

Woolworths’ exit from Endeavor comes at the start of a new financial year with a worse-than-expected trading situation and outlook in its spirits business.

The supermarket chain will use the proceeds to finance the acquisition of the remaining 35% stake in PFD Food Services.

“Woolworths Group’s agreement to sell its remaining shares in Endeavor Group and use the proceeds to fund the acquisition of PFD Food Services needs a better and clearer explanation,” said Ben Williamson, co-founder and co-CEO of the InvestorHub trading platform.

“Woolworths should aim to ensure that shareholders have access to further information behind the decision and the ability to raise questions about the decision.”

Shares in Endeavor fell as much as 2.4% to $5.21, while those in Woolworths traded 0.5% higher.

($1 = 1.4782 Australian dollars)