If you own Woolworths Group Ltd (ASX: WOW) shares, you also, until recently, owned a stake in Endeavour Group Ltd (ASX: EDV).
While Endeavour may not be a household name, its portfolio holdings – including bottle shop outlets Dan Murphy's and BWS – most certainly are.
If you've owned Woolworths shares for some time now, you'll likely recall that Endeavour was spun off from Woolworths back in 2021. And the S&P/ASX 200 Index (ASX: XJO) super market giant's stake in Endeavour has been steadily shrinking since.
With a final $383 million divestment, that stake has now shrunk to zero.
Why are Woolworths shares parting ways with Endeavour?
This morning, Woolworths reported that it had agreed to sell its remaining shares in Endeavour Group, representing around 4.1% of the issued capital, via a block trade.
Woolworths sold its Endeavour shares for $5.23 apiece, generating proceeds of $383 million.
The Endeavour share price is down 2.0% in morning trade on Monday, with shares trading for $5.235 apiece. Endeavour shares are down 14% over 12 months.
Woolworths shares are down 0.2% today at $35.60 apiece. That sees the ASX 200 supermarket stock down 6% in 12 months.
As for why Woolies opted to sell its remaining Endeavour stake, the company said it intends to use the proceeds to fund the acquisition of the remaining 35% in food service distributor PFD Food Services Pty Limited.
Woolworths' $383 million sale of Endeavour shares comes just days after Endeavour fell short of analysts' FY 2024 profit expectations.
Why the Endeavour share price crashed on its results
Endeavour reported its full-year results last Monday, 26 August.
In light of those results, Woolworths shares would likely have gotten more value from the Endeavour divestment if it had happened the week before when the Endeavour share price closed at $5.47.
That's because, by the time the smoke cleared last Monday, the Endeavour share price had tumbled 6.9% to $5.15 a share.
Investors were likely disappointed by the 3.2% year on year decrease in net profit after tax (NPAT), which slipped to $512 million.
Other core financial metrics were positive, however, with FY 2024 sales up 3.6% to $12.3 billion. And Endeavour's full-year fully franked dividend of 21.8 cents per share was in line with the prior year.
Possibly portending the company's separation from Woolworths shares, management said that Endeavour had ramped up work on its One Endeavour program to establish its own technology infrastructure separately from the ASX 200 supermarket giant.
