The Woolworths Group Ltd (ASX: WOW) share price is on course to end the week in the red.
In afternoon trade, the retail conglomerate's shares are down 1% to $42.96.
This follows news that the company is being taken to court by the Fair Work Ombudsman, which has offset an update on its demerger plans.
What was the demerger update?
Earlier today, Woolworths shareholders were given the opportunity to vote on the proposed demerger of its Endeavour Drinks business.
The proposed demerger will create two leading ASX-listed companies. Endeavour Group will be Australia's leading drinks and hospitality business with a portfolio of strong retail and hospitality brands and products.
The company notes that it will also have more than 28,000 team members united around its purpose of creating a more sociable future together. Its portfolio of trusted brands includes Dan Murphy's and BWS, as well as the nation's largest portfolio of licensed hospitality venues.
Whereas Woolworths is expected to remain one of the 20 largest ASX-listed companies and will continue to own some of the most recognised and trusted brands in Australia and New Zealand including Woolworths, Countdown and BIG W.
In addition to this, Woolworths will retain its strong balance sheet with pro forma net cash as of 3 January 2021 of $75 million. This will allow the Woolworths Board to consider capital management options and a potential $1.6 billion to $2 billion return to shareholders.
Shareholder vote
It appears as though shareholders see value in the company's plan, as they have voted overwhelmingly in favour of the demerger.
According to the meeting results, 99.85% of the votes cast were in favour of the demerger.
What now?
According to the release, the last day that the Woolworths share price will trade with its demerger entitlements is 23 June.
A day later on 24 June they will trade ex-entitlements and Endeavour shares are expected to trade on the ASX boards on a conditional and deferred settlement basis. After which, on 1 July, Endeavour shares will begin to trade as normal on the ASX.
It's been a long time coming, but finally the highly anticipated demerger is about to happen. Shareholders will no doubt be hoping it unlocks value in the Woolworths share price in the coming months.
