We haven’t seen a sharemarket takeover frenzy quite like this. Wesfarmers goes over the top with a debt-laden $20 billion tilt at Coles and investors celebrate, sending shares in the Perth-based conglomerate up $1.25 to $38.16 in morning trade.

Predators usually suffer share price weakness when audacious takeovers are unveiled, whilst targets soar. Therefore, it was not unexpected to see shares in Coles jump 83c to $16.94 after hitting a high of $17.08.

All of this created a heady mix of euphoria that sent the All Ords soaring another 70 points to a record high after the Reserve Bank failed to lift official interest rates and takeover speculation continued to sweep media stocks as the new media ownership laws came into effect.

The market is clearly punting that the KKR-led private equity consortium will come back with a higher Coles bid, although I reckon it’s unlikely. Then again, I told ABC Newsradio that Wesfarmers shares would fall this morning.

Given all the regulatory and patriotic pap that has engulfed the Qantas bid, it’s hard to imagine KKR bothering — especially now that the potential upside has contracted with the higher price and deteriorating operating performance of the Coles business.

Whilst Solly Lew’s Premier Investments has accepted the $16.47 Wesfarmers offer, the other major shareholder to watch is the Myer family which still holds about 5% which is today worth more than $1 billion for the first time.

Even embattled Coles CEO John Fletcher must be enjoying the action as his 2.9 million shares and options are worth almost $50 million, more than half which is clear profit. 

Time is of the essence with this process and it was the estimated six month saga flagged by Coles chairman Rick Allert last week which triggered Solly Lew’s decision to cash out his investment straight away and get the Wesfarmers bid off to a flying start.

Wesfarmers wants access to the Coles books straight away and if KKR walks, shareholders could be voting in a couple of months on a deal that could be wrapped up this financial year.

It’s a staggering story and someone needs to finally write the book about Coles Myer as it’s had it all over the past 22 years.

And it might go down as another nail in Melbourne’s claim to be the business capital of Australia. Bleak City can only claim four of the top 15 head offices (ANZ, NAB, BHP-Billiton and Coles) these days and losing the retailing giant to Perth would be a major blow.