(Recasts throughout, adds shares, analyst comment)
By Byron Kaye and Colin Packham
SYDNEY, Sept 30 Australian supermarket giant
Woolworths Ltd on Friday said it is considering offers
to buy its petrol station chain in a deal said to be worth more
than $1 billion, extending an asset sell-off as it shores up its
core grocery business.
The sale would broaden a divestment programme under new
Chief Executive Officer Brad Banducci as he refocuses on the
grocery business, amid a price war with Coles, owned by
Wesfarmers Ltd, and Germany's ALDI Inc.
Caltex Australia Ltd, the co-owner of the chain,
had hired investment bank UBS to help secure a deal valued at
A$1.5 billion ($1.14 billion), The Australian newspaper reported
Woolworths, Australia's top grocer by sales, said it had
received several proposals which were "incomplete and
conditional". It declined to give further details.
Caltex and UBS declined to comment.
The prospect of an exit from the fuel business pushed
Woolworths shares to their highest intraday level in a month on
Friday, as the broader market fell as much as 1 percent.
"We don't think that Woolworths should be a retail
conglomerate. We would like to see it as a clean liquor and
supermarket business, performing competitively against ALDI and
Coles," Clime Asset Management senior equities analyst David
Woolworths last month said it would close its Master's
hardware chain and write off the losses, following years of
criticism about the loss-making home improvement joint venture
with U.S.-based Lowe's Companies Inc.
Woolworths investors are concerned it is losing grocery
sales to Coles, ALDI and others due to high shelf prices which
it has used to subsidise losses elsewhere.
In May, S&P cut its long-term credit rating for the
92-year-old company, which together with Coles supplies most of
the food Australians consume in their homes.
The potential sale of its more than 500 service stations
also underscores the effects an oil price collapse is
having on industries outside resources.
Last month, Woolworths blamed a one-fifth slump in its
fiscal 2016 petrol sales for a slight fall in total group
revenue, a factor it said was caused by declining global oil
prices and a drop in comparable volumes.
($1 = 1.3108 Australian dollars)
(Reporting by Byron Kaye and Colin Packham; Editing by Stephen