Coles Myer likes liquor

Coles Myer is making the offer through its Liquorland subsidiary. Liquorland already owns 18% of Australian Liquor, which it purchased earlier this month also at A$1.20 a share.

The offer values ALG at A$54.2 million and is a premium of around 65% to the trading price of shares prior to Liquorland taking a stake.

Coles Myer boss, Dennis Eck, says the offer represents an opportunity for all ALG shareholders to realise a significant cash premium over recent market prices for their shares.

"This cash offer is being made at a full and fair price."

The ALG board has indicated that it intends to unanimously recommend the offer to its shareholders, in the absence of a higher offer.

ALG floated just last June, raising A$20 million in one-dollar shares.

The company is the third largest liquor chain after Coles Myer and Woolworths/Safeway liquor chains, operating around 40 stores in Victoria, South Australia, Western Australia and New South Wales.

It also has around 140 franchised stores and had projected first year sales of A$153 million.

The full buyout of ALG will further strengthen Coles Myer's market share as it jostles for sales with Woolworths.

Woolworths recently acquired a hold in the Western Australian market by purchasing a 45-store liquor chain. Coles Myer currently has 76 stores in Western Australia but this will be boosted by the ALG acquisition.

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