* Coles spin off to complete in late November
* Wesfarmers to retain 15 pct stake
* Shares edge lower, still trade near all-time high (Adds management quotes, analyst quote and shares)
By Tom Westbrook
SYDNEY, July 23 (Reuters) - Australian conglomerate Wesfarmers Ltd WES.AX said on Monday it will take a smaller-than-expected stake in supermarket chain Coles when it demerges in November, but will hang on to half of a loyalty card programme to keep its hands on shoppers' data.
Wesfarmers announced plans to spin off Coles four months ago, eying a stake of as much as a fifth in a grocer analysts estimate is worth about A$16 billion ($12 billion), in order to seek growth outside Australia's hard-pressed retail sector. sales growth at Coles lagging larger rival Woolworths Group Ltd WOW.AX and big refurbishment expenses looming, the conglomerate said it would begin with a 15 percent stake instead, reinforcing its view that more profitable investments lie elsewhere.
"We're prepared to have some skin in the game ... but it's not such a high amount that it undermines the whole financial rationale for portfolio repositioning," Wesfarmers' Managing Director Rob Scott told analysts on a conference call.
It would keep half of a loyalty card programme called Flybuys, with Coles holding the remainder, he added. Along with a board seat at Coles, the loyalty programme will ensure Wesfarmers continues to have access to the vast pool of customer preferences collected by the country's second-biggest grocer.
"What we can use that data for is to essentially make better decisions in our businesses," Scott said, listing marketing, product selection and site spotting as applications.
Wesfarmers shares fell 1.1 percent after the announcement, only a little further than the broader market's .AXJO drop of 0.9 percent, but still hold near all-time highs hit earlier in the month.
The Perth-headquartered company is in the midst of its largest reshuffle since it bought Coles a decade ago. It sold a coal mine in December and backed out of a disastrous foray into British hardware in May.
Woolworths' quarterly growth outpaced Coles for the first time in seven years in 2017 and in May it posted sales growth more than four times faster than Coles'. probably the perfect time to get rid of Coles," said Mathan Somasundaram, market portfolio strategist at stockbroker Blue Ocean Equities.
"I assume they need to free up a bit more capital," he said of the decision to take a slimmer holding, lowering its investment and any exposure to dilution in further capital raising.
If approved by regulators shareholders, the split could take effect before the end of November, Wesfarmers said. Wesfarmers shareholders will each be handed a share in Coles when it lists, and the new company will aim to pay 80 to 90 percent of profit in dividends.
($1 = 1.3477 Australian dollars)