Seven Group’s Coates Hire sale put on ice

Billionaire Kerry Stokes-controlled Seven Group (ASX: SVW) has announced that the strategic review which potentially could have led to a sale of the part-owned equipment hire firm Coates Hire has concluded with no transaction taking place and ownership to be retained in its current form.

There were some lofty valuations placed on Coates Hire that had investors expecting a big pay day for Seven Group. The announcement that cash will not be realised for the Coates holding anytime soon is unlikely to sit well with investors and the share price will likely come under pressure today.

The failure to sell Coates comes hot on the heels of heavy equipment leasing firm Emeco Holdings’ (ASX: EHL) profit downgrade. Emeco’s announcement, along with profit downgrades from numerous mining service firms including Calibre Group (ASX: CGH), will also have investors questioning how another division of Seven Group is performing, namely the Caterpillar franchise Westrac.

Foolish takeaway

Mining and resource-related companies are in a state of flux at the moment. Inventors need to be aware of the risks of investing in these sectors while at the same time not being blind to potential opportunities.

In the market for high yielding ASX shares? Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading

Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.