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By the time the board of retailing giant Coles Group recommended Wesfarmers' $21.9 billion takeover bid this week, the company had been in play for over a year. During that time its executives had to steer a steady course; maintaining shareholder value and positioning the business for future growth — setting to one side the knowledge that everything being done today could be unravelled tomorrow by a new owner.

Flagged as the largest takeover in Australian corporate history, the bid represents the endpoint — but only as far as financial markets are concerned. For the executives running the businesses the takeover marks the beginning of a new era. [[LeftQuote:At this level of corporate cut and thrust, the barbarians are rarely far from the gates. And so it was with Coles Group]] With a new ownership structure (Coles shareholders will end up with 44 per cent of the group, compared to Wesfarmers shareholders 56 per cent) and new management, massive change is expected in the future, not least in information technology where Coles's supermarket chain has been long cast by some as the laggard compared to arch rival Woolworths.

Coles is meanwhile midway through a five-year transformation project, much of it underpinned by new information technology, expected to deliver millions of dollars' worth of annual saving. This program, however, will inevitably be scrutinized as the takeover rolls ahead. Wesfarmers, for example, will undoubtedly seek closer integration with its own information systems. And, now shouldering massive debt to finance the takeover, Wesfarmers will be looking to squeeze savings from every quarter.

Yet even before a suitor had been selected Coles's information technology found itself in the spotlight's glare.

Massive takeovers require massive amounts of due diligence: the process by which value is assigned to corporations. Teams of professionals are permitted access to vast amounts of confidential information, combing financial statements, probing inventory levels, assessing human capital and poking about in the information systems.

The kimono isn't so much opened as shredded.

While due diligence is supposedly confidential, the process often leaks. A "well placed source" mentions to someone in the media that perhaps an entity is hoarding too much inventory, or that its information systems are in disarray, and that this means there is a justifiable reason for suitors to lower their bids.

At this level of corporate cut and thrust, the barbarians are rarely far from the gates. And so it was with Coles Group.

The original barbarian — Kohlberg Kravis Roberts — the American leveraged buyout firm whose bid for RJR Nabisco was immortalized in the best selling book Barbarians at the Gate, was one of the first to throw its hat into the ring for Coles. Other interest came from a range of suitors including Wesfarmers, a private equity bid led by TPG and European buy-out fund Permira.

By early June — when the barbarians were literally crawling over Coles for due diligence — a newspaper article appeared in the June 7 issue of The Australian Financial Review headlined "Investors shudder at Coles IT bungles". Billed as comment, rather than analysis or a straight news report, the article nevertheless noted that one of the latest "titillations" from due diligence was "allegations of IT cost overruns and implementation delays which are said to be threatening the transformation of Coles's supply chain and inhibiting the ability of Coles supermarkets to function as efficiently as those of Woolworths."

Classic spoiler tactics: sow the seeds of doubt regarding the value of the IT, and then carve a dollar off the bid price. CIO Peter Mahler's picture appeared with the article, captioned as having his "job believed complicated by internecine struggles".

A day later the newspaper ran a letter to the editor from Coles's chief executive officer John Fletcher stating: "Your claims of information technology bungles and cost overruns are without basis." According to Fletcher, Coles's technology transformation was on schedule and on cost.