Endeavour Group makes Australia stock market debut after Woolworths split

(Reuters) – Australian liquor and hotel company Endeavour Group made its debut on Thursday, fetching a valuation of close to A$11 billion ($8.33 billion) two years after grocer Woolworths Group Ltd set into motion plans for a demerger.

Endeavour’s shares opened at A$6.50 and was trading around A$6.00 half an hour later, valuing the company that operates more than 1,600 liquor stores and 330 hotels nationally at around A$10.85 billion.

Woolworths, the country’s largest supermarket chain, in 2019 announced plans to merge ALH Group, its hotel arm, with its drinks business to form Endeavour Group with plans to eventually spin-off the company in 2020.

The plans were delayed by the pandemic, which saw stay-at-home orders across Australia hammer retail outlets, with Endeavour’s hotel business also getting hit.

Woolworths shares fell 15.4% on Thursday after the split, and were last down 12% at A$37.40. The company’s shareholders got one Endeavour share for each they already own in the former parent.

Endeavour, which owns liquor retailers DanMurphy’s and BWS, reported sales of A$10.6 billion and a profit of A$328 million in fiscal 2020, down 26% compared with a year earlier.

For shareholders, Endeavour plans to pay dividends based on a payout ratio of between 70% and 75% of profit.

($1 = 1.3200 Australian dollars)

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