Another all time high for Wesfarmers Ltd shares yesterday as it denied that it was withholding anything on its Coles Group bid from the market.
The shares hit an intra day high of $44 and closed at $43.50, up $1.11 on the day as big institutional holders chased the company's stock.
More than 2.5 million shares were traded, which is higher than usual, in another day of very strong activity in WES shares.
Last Friday saw the shares running higher, closing $1.50 higher on the day and $4.02 higher on the week.
Yesterday Wesfarmers was forced to reply to an ASX query over the surging share price.
The conglomerate's share price rose from $38.71 last week to yesterday's intraday high of $44. That was after widespread media speculation that it would increase the scrip component of its Coles offer.
The reports suggested the shares part of any Coles offer could be 40 per cent of the total value of the bid, which would increase WES's weighting in the various indexes. The initial bid at $16.47 a CGJ share had a 25 per cent scrip component.
That produced the sharp rise in buying as value and index investors chased the shares to build up their holdings at lower prices, thereby booking themselves some easy performance for when the Coles bid happens.
"No, the company is not aware of any such information concerning it that has not been released to the ASX," WES told the market in its reply to the ASX query.
In its replyWES pointed to an investor briefing on the ASX's corporate file Open Briefing in May where it indicated it was "looking at ways to make it (the scrip component) a bit higher".
The ASX asked for any other reasons for the share price surge and WES said that least three analysts had increased their coal price assumptions for 2008 and in some cases changed their recommendations for Wesfarmers shares after upgrades for coking coal prices in particular.
Wesfarmers has interests in coal mines in three Australian states, including the Curragh export coking coal operation in Queensland and the flood-affected Bengalla mine in the NSW Hunter Valley. It has domestic mines in Western Australia.
WES also pointed to indications that institutional investors were reweighting their portfolios to Wesfarmers on the basis that the conglomerate may acquire Coles, the company said.
Wesfarmers made its$19.7 billion indicative offer for Coles at $16.47 a share, in April.
Woolworths has been trying to find a way into the Coles sale without success.
The TPG-led US group is trying to draw up bids for an offer by itself, and one involving Woolworths. Woolies hasn't decided what to do, as yet.
Coles shares rose 8c to $16.78 and Woolies shares rose 28c to $27.79.
