Australia's Wesfarmers Ltd <WES.AX> said on Tuesday it will sell 4.9% of Coles Group <COL.AX>, the supermarket chain it spun off in 2018, suggesting it was a good opportunity to book some profits.
Shares of Coles have jumped more than 34% since it started trading in November 2018. It closed 1% lower on Tuesday.
Wesfarmers' announcement also comes on the heels of Coles posting near-flat earnings growth for the half year and acknowledging it had underpaid some store managers for six years.
After the sale, retail conglomerate Westfarmers will keep a 10.1% minority stake in Australia's No. 2 grocery chain, and reserve its right to nominate a director to Coles' board.
"We have been pleased with the performance of Coles as an independently listed entity and believe it is an appropriate time to realise value for our shareholders," Wesfarmers Managing Director Rob Scott said in a statement.
Wesfarmers will report its half-year results on Feb 19.
(Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Muralikumar Anantharaman and Kim Coghill)
