The Wesfarmers Coles demerger is certainly worth discussing, particularly considering the size of the Coles Listing coming within the top 30  ASX companies.

Some items of interest/concern –

The Coles Board expects to have a dividend payout ratio of 80 to 90 per cent.

The New listing will be carrying a debt facility of $4 billion.

What is going to be the future direction of Wesfarmers post demerger.

In a year or two will Wesfarmers get Coles to buy Kmart and Target from them

The continuing impact of on-line shopping on bricks and mortar retail outlets

What is the real reason for the demerger as I find some of the verbiage by Wesfarmers a  little contradictory – ie: “Demerging Coles shifts our investment weighting and focus to businesses with higher growth prospects” whilst in the next paragraph they say “Coles is well positioned to grow as a defensive business with strong investment characteristics”

Additional issues to keep in mind with such a large new listing coming to the market is that Investment Funds managers have to re weight their Portfolios. Should a Fund have a specific percentage weighted to retail / consumer goods, then to maintain that weighting they will sell down some of their portfolio in say Woolworths, JB HiFi, Harvey Norman, Metcash etc.