The $A20bn (€12.1 billion)sale of Australia's biggest retailer, Coles Group, and the lucrative fees involved have created a feast for investment bankers. Carnegie Wylie and Deutsche Bank have been working for Coles' defence since a US-led private equity bid emerged in August 2006. The Coles board was roundly criticised for rejecting the two offers that followed, a decision based largely on internal valuations by Deutsche's team but seriously questioned when just months later results were much worse than expected. However the battle was re-energised through a raid by Western Australian-based conglomerate Wesfarmers in April 2007.

Wesfarmers, has lifted the price that a rival bidder would have to pay for retailer, Coles Group. On May1, 2007, Wesfarmers made an offer of $A17.25 (€10.48) a share to Coles' institutional shareholders. The strategy told rival bidders that the reserve price for the auction of Coles had increased from $A16.47 (€10) to $A17.25 (€10.48). It also indicated that Wesfarmers was prepared to pay even more.

The news that Wesfarmers was seeking a larger stake caused institutions to hold back and Coles' share price to $A17.72 (€10.76). It now seems that Macquarie Bank advisers of the Wesfarmers-led consortium began expressing interest in selling Coles shares. Wesfarmers has a 12.8% voting interest in Coles and tensions have been rising between the Australian-listed conglomerates. Wesfarmers does not intend to sign an agreement that it will not seek commitments from Coles stakeholders.

Another suitor may have signed confidentiality agreements to join Tesco in gaining access to Australian retailer Coles Group's data room. Wesfarmers, which launched a bid for the group, has been refused the right to conduct due diligence, because it will not sign a standstill clause preventing it from purchasing shares in the company. Coles rival Woolworth's, is currently in discussions with a private equity consortium led by Kohlberg Kravis Roberts & Company on whether to make a joint bid for Coles. Coles spokesman, Scott Whiffin, said no parties have yet gained access to the data room.