Coles – takeover by Wesfarmers (2007)

Overview

On 2 July 2007, Coles Group Limited (Coles) and Wesfarmers Limited (Wesfarmers) announced a proposal for Wesfarmers to acquire Coles. This was implemented on 23 November 2007, resulting in a CGT event for Coles shareholders.

The following information will help you work out the CGT consequences for your Coles shares. You need to do this for your 2007–08 tax return.

As a Coles shareholder you disposed of your shares to Wesfarmers for one of three consideration options.

Table 1: Consideration options

Option	Consideration for each Coles share
	cash ($)	Wesfarmers ordinary shares	Wesfarmers partially protected shares
Standard	4.00	0.14215	0.14215
Maximum cash	9.6118	nil	0.14215
Maximum scrip	2.9583	0.16854	0.14215

Class ruling

We issued a class ruling, Class Ruling CR 2007/114 Income tax: scrip for scrip: acquisition of Coles Group Limited by Wesfarmers Limited.

Did you make a capital gain?

To make a capital gain, the cost base of your Coles share at the time of the takeover must be less than the consideration you received under the takeover.

We accept that, depending on the option you chose, you received consideration to the value shown in the below table.

Table 2: Consideration received

Option	Consideration received
Standard	$15.86 per share
Maximum cash	$15.58 per share
Maximum scrip	$15.91 per share

These values represent the total consideration you received for a single Coles share, depending on the option you chose. They are made up by adding what you received in cash to the market value of the Wesfarmers ordinary and Wesfarmers partially protected shares you received.

On 2 July 2007, Coles Group Limited (Coles) and Wesfarmers Limited (Wesfarmers) announced a proposal for Wesfarmers to acquire Coles. This was implemented on 23 November 2007, resulting in a CGT event for Coles shareholders.