November 21, 2018 / 12:47 AM / 6 months ago

Wesfarmers spin-off Coles makes solid trading debut, valued at $12.5 bln

Nov 21 (Reuters) - Australian conglomerate Wesfarmers Ltd’s spin-off Coles Group began trading on Wednesday at A$12.49, giving it a market value of A$17.27 billion ($12.46 billion) that was above expectations.

The debut on the Australian bourse underlined confidence in the nation’s No.2 supermarket chain even as it faces fierce competition in the supermarket sector, where a price war with arch rival Woolworths Group Ltd is driving deflation, amid heightened online competition.

Without Coles, which was estimated to be worth about A$16 billion, a slimmed-down Wesfarmers would earn nearly 60 percent less revenue, but could generate about 50 percent more return on capital, according to research released by the company last month. ($1 = 1.3856 Australian dollars) (Reporting by Aditya Soni; Additional reporting by Chandini Monnappa in Bengaluru; Editing by Muralikumar Anantharaman)

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