Home > Latest News > Serious Questions Raised After Woolworths Splashes The Cash For MyDeal

Serious Questions Raised After Woolworths Splashes The Cash For MyDeal

Serious questions are being asked as to why Woolworths acquired a controlling shareholding in online site MyDeal a deal worth $243M last week.

The price equated to 3.8 times forecast revenue for the loss-making group during the 2022 financial year.

The move comes as Kogan, and Catch the Wesfarmers owned business struggle in the e-commerce market which is witnessing record falls following the opening of retail stores after COVID.

Wesfarmers whose shares are down 15% during the past 12 months is facing more record losses in with Catch failing to deliver a profit.

The business acquired by Wesfarmers for $230 million in 2019 last reported a loss of $43-45 million for the six months to 31 December 2021, which is $1 million shy of its losses for the entire FY21 calendar year.

Kogan has seen their share value fall 63% during the last 12 months with the shares trading yesterday at $3.64, 12 months ago they were trading at $13.

Last week Woolworths announced an agreement to purchase 80 per cent of online marketplace MyDeal for $1.05 per share, a 63 per cent premium to the company’s last traded share price.

The deal also includes taking on debt.

Credit Suisse analysts were particularly harsh, suggesting that the transaction appeared to add no value to Woolworths and seemed contrary to the expectations of some investors for a return of surplus cash.

 



You may also like
Woolworths Tightens Work From Home Rules
Shein & Temu Set To Lose More Oz Shoppers
ASX
Stock Watch: Harvey Norman, Wesfarmers Climb, Kogan Crashes, JB Hi-Fi Up 70%
Ruslan Kogan Wanted To Buy Catch Before Wesfarmers Shut It Down
Wesfarmers To Shut Down Loss-Making Catch Business

Popular Posts

Albo Set To Go On Spending Spree As Retailers Respond To Rate Cut
Latest News
/
/
Xi Strikes A Deal With China’s Tech Billionaires
Latest News
/
/
RBA Cuts Rates, Full Statement Reveals Why
Latest News
/
/
Future Of Network 10 & Paramount Could Come Down To Deal With US President
Latest News
/
/
Belkin’s SoundForm Earbuds Offer ENC And Multipoint Connectivity
Latest News
/
/

Digital Magazines

Recent Post

Albo Set To Go On Spending Spree As Retailers Respond To Rate Cut
Latest News
/
//
Comments are Off
Analysts are now tipping that the Albanese Labor Government could go on a mammoth spending spree in an effort to...
Read More