Something novel in the 'price protected shares'. I'd be hoping that WES shares are about $45 in 4 years...
How well will Coles have to perform to cover it's cost of capital: from John Durie (linked above):
The deal is one thing, the hard part is getting a $20billion deal to earn its keep over the next four years - and that's no easy task. On some estimates, Coles will earn $1 billion this financial year.
Wesfarmers' cost of capital with Coles will be around 10 per cent - which means Goyder will have to double earnings to make his cost of capital.
This won't be a walk in the park - but just for starters, there are some $400 million in costs that can be readily taken out of the business.
WES has a reputation for getting good managers into a business, and then letting them manage. If the Coles board accepts this revised bid, WES will be able to get on with the business of doing that.
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