a buy under $15, page-4

Dilmac,

The 3rd of March is around the day we will find out what % of retail investors took up their entitlement. There is an argument that says if an index fund took up its full pro-rata entitlement then it would then be overweight in WES if there is a less than 100% take-up by the retail component.

Less than 100% take-up is assured with estimates ranging as low as 15%. What is not known is whether the instos will estimate the take-up and sell a proportion of stock off at a profit before the final figure is released. Anyway this has to be balanced by the fact that a lot of institutions would have been underweight in WES just because of the debt level and looming rights issue. Now these factors have been put to bed even Merrill's David Errington has put down the sword.

"Merrill Lynch analyst David Errington, a longstanding critic of the Coles acquisition, said he viewed the equity raising positively, despite expecting it would dilute earnings per share by about 6 per cent.

'A major uncertainty has now been removed by Wesfarmers and, although earnings risks overhanging some of Wesfarmers' businesses remain, we feel that such risks are probably adequately factored into the current share price,' he wrote in a briefing note to clients."