Wesfarmers Ltd. on March 30 said it will sell another 5.2% stake in Australian grocer Coles Group Ltd., which spun off from Wesfarmers in late 2018.
Coles shares rose 6.93% to close at A$16.82 on March 30, while Wesfarmers shares jumped 11.29% to A$35.89 on the news.
Australian retailer Wesfarmers, which sold a 4.9% stake in Coles in February, will retain a 4.9% share in the company following the sale. Since Wesfarmers will hold less than 10% of the group, it will lose the right to name a director to Coles' board.
Following the deal, Wesfarmers will retain its remaining shares in Coles for at least 60 days.
The company said it will provide further details, including price per share and pretax proceeds, on a later date.
Wesfarmers Managing Director Rob Scott said "the significant and unprecedented events of the past few weeks" has highlighted the importance of balance sheet flexibility for the company at a time of economic uncertainty.
Coles and Wesfarmers will continue operating their 50/50 Flybuys joint venture.
On Feb.19, Wesfarmers said it would raise pretax proceeds of A$1.05 billion from the sale of its 4.9% stake in the supermarket chain.