Doors will be shut on Woolworths’ failed Masters chain by the end of the year, with trading at all stores to cease by December 11.
Woolworths has today advised that it has agreed to three separate contracts facilitating its exit from home improvement for estimated gross proceeds of $1.5 billion.
Woolworths stated that, after wind‐down costs and prior to any shareholder payments, estimated net proceeds of approximately $500 million are expected.
Earlier today, Mitre 10 Australia owner Metcash had advised that it will acquire Home Timber & Hardware Group for a cash consideration of $165 million.
Woolworths has advised that Masters inventory will be sold down in the coming months, with a proposal also having been made for the purchase of Masters properties.
Woolworths advised that GA Australia has provided an underwritten recovery for the value of the Masters inventory and has been appointed to manage its sell‐down.
The underwritten recovery, which is subject to certain adjustments, is estimated to deliver gross proceeds of approximately $500 million.
Home Consortium (made up of Aurrum Group, Spotlight Group and Chemist Warehouse) has proposed to purchase the Masters properties through acquisition of 100 per cent of the shares in Hydrox Holdings, which is subject to the consent of joint venture partner Lowe’s.
The transaction will include 40 Masters freehold trading sites, 21 Masters freehold development sites, along with 21 Masters leasehold sites, with Home Consortium planning to repurpose the sites into multi‐tenant large-format centres.
Woolworths stated that it will acquire three Masters freehold sites, along with taking assignment of 12 leases, to facilitate a complete exit of Hydrox.
Woolworths CEO Brad Banducci stated the “agreements are the result of an intensive seven-month process” reviewing all possible exit options and extensive negotiations.
“This decision means management can focus on driving the momentum in our core businesses,” Banducci commenteed. “The agreements provide certainty to our Masters team, suppliers and customers. It is the right resolution for our shareholders.”
