Homebase may become Bunnings in three to five years’ time
Following the dismissal of the J.Sainsbury bid, Australian Wesfarmers has made a conditional offer of £340million for Homebase to the Home Retail Group.
Wesfarmers and Home Retail group began discussions in September 2015 and due diligence work commented under a confidentiality agreement in October 2015.
An exclusivity agreement was signed in early December 2015 and confirmatory due diligence has been completed, with signed transaction documentation.
However, Wesfarmers points out there is no certainity the offer will lead to an agree transaction.
Homebase boasts 265 stores in the UK and Ireland and has a reported revenue of £1.46million for the 12 months ended 29 August 2015.
Wesfarmers has cited its rationale for acquisition, stating the UK home improvement market is attractive and growing, and that it would be a first step to reinvigorate the business. It may see the Homebase business rebranded as Bunnings over the next three to five years.
Chief executive of Home Retail Group John Walden stated: “In Homebase, like-for-like sales grew by 5% while total sales declined by 4%. The Homebase Productivity Plan, which includes an aggressive store closure programme, overhead reductions and customer proposition improvements, has begun to position Homebase as a smaller, higher quality and more efficient business.” He continued stating the sale discussions “would provide good value for shareholders and a growth opportunity for Homebase colleagues. The potential transaction would allow the Group to focus on Argos and its transformation plan.”