14-Jan-2016

Home Retail mulls over £340m bid for Homebase 

Access Point - Homebase

 

 

Home Retail Group are in advanced talks with Australia’s Wesfarmers to sell the Homebase chain for £340m in cash, enabling it to give Argos all the attention.

 

Wesfarmers is a leading hardware retailer in Australia and its second biggest supermarket owner. If the bid, which has thrown a spanner in the works for Sainsbury’s, is accepted, then Wesfarmers will look to “reinvigorate” Homebase’s assets.

 

"The UK home improvement and garden market is an attractive and growing market," Wesfarmers said in a statement confirming a conditional offer Homebase, Britain’s second largest home improvement and garden retailer, had been made.

 

The grocer’s interests lie predominantly in Argos, which it has already struck a relationship with and it is understood that Sainsbury’s approach to buy out the entirety of Home Retail in November came a couple of months after Wesfarmers started talks.

 

CEO Mike Coupe repeatedly declined to comment on Homebase, leading to speculation that the business would be offloaded were a sale to go ahead, and justified its bid citing that the combination of Argos and Sainsbury’s product lines would create a business that would rival Amazon, John Lewis and Marks and Spencer.

 

Home Retail Chief Exec John Walden said a sale represents good value for investors as it would come about a year into a three-year improvement strategy for the chain.

 

"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 representsa an even greater opportunity for building long-term shareholder value," he said.

 

 

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