Wesfarmers shelves Officeworks IPO plans

officeworks visual merchandise stationeryWesfarmers has shelved its plans for an initial public offering (IPO) of Officeworks, citing the current unfavourable equity market conditions.

The retail conglomerate has been undertaking a strategic review of the stationery chain, which included a potential IPO of the business and has now “determined that an IPO of Officeworks at this point in time would not realise appropriate value and would not be in the best interests of its shareholders.”

Officeworks’ earnings rose 5.1 per cent to $62 million in its recent half-year results.

Outgoing Wesfarmers MD, Richard Goyder, said the group was “comfortable retaining Officeworks in its portfolio and the business would be divested only if it was considered to be in the best interests” of its shareholders.

Since Wesfarmers acquired the business in 2007, Officeworks has more than doubled its earnings and improved its return on capital from 5.7 per cent in the 2009 financial year to 13.9 per cent in the first half of the 2017 financial year.

The retailer has expanded to 164 stores nationally, with its most recent opening in the heart of Adelaide’s CBD.

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