Key facts
- Coles Group has ended discussions with TPG Capital regarding the acquisition of Greencross Pet Wellness.
- Coles shares rose as much as 5% following the announcement.
- TPG Capital was reportedly aiming for a deal valued at A$4 billion.
- Citi analysts noted negative investor feedback as a factor potentially influencing the deal.
Coles Group announced on Friday that it has concluded discussions with U.S. private equity firm TPG Capital concerning a potential acquisition of Greencross Pet Wellness. The news led to an increase in Coles' shares, which climbed as much as 5% during trading.
Weeks prior, Coles had confirmed that talks were in progress for the purchase of the pets and vets business, a disclosure that had previously resulted in a share price decline of over 4%. Analysts at Citi suggested that negative investor feedback surrounding the potential deal likely contributed to its termination.
Reports indicated that TPG Capital had been seeking a valuation of approximately A$4 billion for Greencross, a figure it had considered for a potential initial public offering. However, Citi expressed concerns about the deal's funding structure and a perceived weakening outlook for the pet care industry.
Coles shares reached as high as A$23.68 on Friday, positioning the stock for its most significant single-day gain since early March and contributing to a more than 2% rise in the staples sub-index.