Why Woolworths Limited is in a trading halt today

Shares in supermarket and liquor giant Woolworths Limited (ASX: WOW) entered a trading halt this morning in order to properly update the market on its home improvement joint venture business Masters, which it is considering divesting.

The trading halt is expected to last until tomorrow when the company releases its full-year 2016 results.

Woolworths announced the closure of Masters after it was unable to reverse many years of losses incurred attempting to rival Bunnings, which is owned by Wesfarmers Ltd (ASX: WES) – which also owns Coles.

Metcash Limited (ASX:MTS) is expected to make a play for Woolworths’ Home Timber and Hardware venture, although a number of potential buyers including a private equity firm are reportedly interested in acquiring the business.

It looks as though investors will be getting an update on the divestment process tomorrow, as well as the performance of Woolworths’ core grocery and liquor divisions in the form of its annual results. Although, after seeing Wesfarmers’ report this morning, it’s become obvious that Coles will be a tough act to beat for Woolworths’ new management team.

The media have also variously suggested that Woolworths could divest its other assets including petrol stations, hotels, and the Dan Murphy’s liquor warehouse. At least one commentator has suggested that the lack of love for Woolworths from the market could see shares bounce back to $30 sooner rather than later, but to my mind that will depend on how well management is able to right the ship.

Expect more coverage from us when Woolworths reports tomorrow.

How 1 Man Turned $10K Into Over $8 Million

Discover how one man turned a modest $10,600 investment into an $8,016,867 fortune. Learn more about this man and how you can start down the path toward financial independence. Simply click here to learn more.

Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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.