Australia's Coles Group ASX:COL said on Wednesday it is in discussions with U.S.-based private equity giant TPG for a potential acquisition of Greencross Pet Wellness Company, sending its shares to a two-week low.
The Australian Financial Review (AFR) had reported earlier in the day that Coles was in advanced discussions with TPG to acquire the private equity-backed pets and vets business.
The newspaper suggested that although the sale price remains uncertain, TPG is likely aiming for around A$4 billion ($2.76 billion), the valuation it had sought for Greencross in a potential float.
Coles, which was spun off by Wesfarmers ASX:WES in 2018 and is run by Leah Weckert, approached buyout giant TPG almost a year ago, the local media outlet reported, citing anonymous sources with knowledge of the matter.
Coles said it will only pursue the acquisition if the transaction can generate strong shareholder returns, adding that discussions remain incomplete with no certainty of a transaction proceeding.
Shares of Australia's No.2 grocer slid as much as 7.8% to A$22.48 by 0040 GMT, marking their biggest intraday loss since February 27. The stock was also the top loser on the benchmark S&P/ASX 200 index ASX:XJO.
($1 = 1.4482 Australian dollars)