Woolworths has revealed details of the restructure plan that kicks off its Endeavour Group transformation.
The directors of the Woolworths board have unanimously recommended that shareholders vote in favour of the restructure plan.
The first stage involves an internal reorganisation of assets and liabilities relating to the Woolworths drinks business, as well as Woolworths’ 75% ownership interest in ALH being transferred into a distinct legal entity within Woolworths Group to create Endeavour Group.
Following the restructure, Woolworths will seek to complete an ALH merger as step two of the process. Upon completion of the ALH merger, Endeavour Group will be 85.4% owned by Woolworths and 14.6% owned by Bruce Mathieson Group.
The ALH merger does not require shareholder approval.
Following this, it is intended that the newly formed Endeavour Group will be separated from Woolworths Group by way of a demerger or other value accretive alternative.
The Federal Court has approved the dispatch of a Restructure Booklet for a Restructure Scheme Meeting (‘EGM’) to be held on Monday, December 16, 2019.
Woolworths Group Chairman, Gordon Cairns said: “In this new era of retail, the restructure represents another step in the transformation of Woolworths Group.
“It will lead to the creation of Australia’s largest integrated retail drinks and hospitality business. On behalf of the Board, I encourage shareholders to read the Restructure Booklet and vote in favour of the Restructure Scheme at the EGM.”
Key Endeavour Group restructure plan dates
Woolworths Group expects to mail the restructure plan booklet to shareholders on or about November 12, 2019.
It is currently anticipated that the Restructure Scheme will be implemented early in 2020.
The expected Endeavour Drinks Restructure Scheme implementation date is February 2, 2020, with the expected ALH merger implementation on February 4, 2020.
Endeavour Drinks sales increase 4.9%
Endeavour Drinks announced last week that its sales increased 4.9% in the latest quarter to $2.2 billion with comparable sales increasing 3.2%.
BWS and Dan Murphy’s both reported higher comparable sales with growth across all major categories led by beer and spirits.
“In Endeavour Drinks, both BWS and Dan Murphy’s delivered comparable growth across all key categories with beer and spirits and the growth of Pinnacle the highlights,” said Brad Banducci, CEO, Woolworths Group.
Online sales momentum increased for both BWS and Dan Murphy’s, with Endeavour Drinks’ online sales increasing 20.7% on last year.
New apps were launched for Dan Murphy’s and BWS with Woolworths noting there had been early positive feedback from customers on the improved customer experience and personalisation.
BWS launched a partnership with Uber Eats in Victoria which is now offering delivery options for customers at around 200 stores.
During the quarter, the Dan Murphy’s loyalty program (My Dan’s) was relaunched with the membership base growing to over 3.7 million.
During the quarter, seven BWS stores were opened, and one store was closed ending the quarter with 1,352 stores. Dan Murphy’s store network was unchanged, ending the period with 230 stores.