The Coles board and its adviser, John Wylie, remain locked in negotiations with Wesfarmers today over the fine detail of an agreed $20 billion-plus takeover bid.

The only announcement from Coles this morning was this trading halt request specifying that it is only negotiating with Wesfarmers, which has also been suspended.

John Wylie has been up to all his usual tricks in order to get Wesfarmers to pay up for a faltering Coles supermarket business. This is what Crikey revealed about him on February 19, 2002:

Wylie was the legendary auctioneer who literally raised $30 billion selling off Victoria’s energy assets to a range of gullible foreign utilities who now hold assets worth about $20 billion.

His tactics were brilliant as one trick he would employ up the top of 101 Collins Street would be to get the leading bid team in a room and rant and rave about rivals offering more.

He’d then walk into an adjacent room and rant and rave such that the lead bid team could hear him. However, on some occasions there wasn’t actually anyone in the second room. Wylie would then return and claim that the rival bidder was prepared to go higher.

On a couple of occasions you had indicative bids lodged on Friday afternoon rising by a couple of hundred million by the time the final contract was signed and all the while the original indicative offer was the highest all the way.

Memories of this story came flooding back when The Sunday Age published the following on its front page yesterday:

The sale of Coles took an unexpected turn yesterday, with a mystery bidder surfacing just before the 9am deadline. The move ensured that the takeover of Australia’s second biggest retailer would set a record.

The real story was that the Wesfarmers consortium had fallen apart and Wylie was desperately trying to get it up for a solo bid for the whole company, given the Woolies offer for combinations of Target, Officeworks and Kmart was the only miserable alternative.

It will be interesting to see how tough the media is on Wylie who is the joint proprietor of Australia’s most reputable stable of business commentators through Carnegie Wylie’s almost 50% stake in The Eureka Report.

Alan Kohler is so sensitive to conflict of interest claims about Wylie that we actually saw some reverse bias on Sunday morning when he unloaded with this editorial on Inside Business attacking the Coles sales process as a “debacle” that should have been handled more quickly.

If Coles ends up getting 1c more than the $16.47-a-share that Wesfarmers spent building its 12.8% stake, then the extended process has been well worth the effort.

Peter Fray

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