Woolworths shareholders have overwhelmingly backed plans to spin-off Endeavour Drinks Group and restructure the business alongside ALH Hotels to form Endeavour Group.
Over 99.5 per cent of shareholders voted in favour of the move, which now heads to the Federal Court on Thursday for approval.
Subject to Federal Court approval Woolworths said it “intends to implement the Restructure Scheme to combine its drinks and hospitality business to create Endeavour Group on 2 February. Woolworths Group will then implement the ALH Merger to combine Endeavour Group with Mathieson Group’s interests in ALH on 4 February 2020”.
Woolworths first revealed details of its intention to spin-off EDG and ALH in July, with Chairman Gordon Cairns saying: “The Board believes that a merger of Endeavour Drinks and ALH followed by a separation, is in shareholders’ best interests and will benefit customers and team members of both groups.
“The decision has been taken after consideration of the future prospects of both businesses and how they can be best realised. It reflects the Board’s focus on maximising long-term shareholder value.”
Woolworths said that the separation will allow it to “benefit from a simplified organisational structure, a greater focus on its core food and everyday needs markets and opportunities to continue to build out the Woolworths Group retail ecosystem”.
Woolworths Group CEO, Brad Banducci, said: “Over the past three years we have progressively moved from a period of fixing the basics as part of our turnaround to investing for the future as part of our transformation.
“As we look to build customer differentiation in all of our businesses, and prepare for an agile and digitally-enabled future, we have decided to simplify Woolworths Group through a combination and subsequent separation of Endeavour Group.”
The vote on Monday came after Cairns confirmed Woolworths had uncovered further wage underpayments, telling the EGM: “We fully expected to (find more cases) and we have. But not to the same extent as in the supermarket business.”
Banducci and Cairns have already agreed to cut their pay packets as a result of the discovery of underpayments, with Cairns advising shareholders that team members at Dan Murphy’s, Big W, and BWS were also likely to be affected.