Bunnings Buying Into UK Hardware Chain
Wesfarmers whose Bunnings stores are looking to be a retailer of Iot automation devices despite limited success with the Belkin Wemo gear, is set to snap up a UK hardware chain.
The UK DIY chain Homebase which is part of the Home Retail group is up for sale with Wesfarmers offering $725M for the harware chain.
The news comes as Wesfarmers looks to rationalise their store operations in Australia with insiders tipping that the Companies struggling Target chain could be restructured or even closed down despite 3.1% growth in the last quarter.
“This deal would represent good value for shareholders and a growth opportunity for the Homebase business and its colleagues. The sale would allow the group to focus on Argos and its Transformation Plan, with an improved balance sheet and financial position, which I believe represents an even greater opportunity for building long-term shareholder value,” Home Retail Group chief executive John Walden said in a statement.
Reuters said that Home Retail said it had begun talks with Wesfarmers in September, and had received a firm offer letter in November from Wesfarmers. Wesfarmers has completed its due diligence and the two companies are currently finalising the transaction documentation, Home Retail said.
Under the terms being discussed Wesfarmers would buy the entire Homebase business, including all stores and dedicated distribution centres. Product brands owned by the company including Habitat, Schreiber and Hygena will be excluded from the sale, but licensed for use by Homebase for one year.
Sainsbury’s said earlier this month it had made an approach to buy the whole of Home Retail in November, but its interest lies mainly in its bigger Argos general merchandise business.