18th Jan 2016 07:17
LONDON (Alliance News) - Home Retail Group PLC on Monday confirmed it has struck a deal to sell its Homebase DIY and garden centre chain to Australian conglomerate Wesfarmers Ltd for GBP340.0 million and said it would return a chunk of the cash to shareholders.
Home Retail will sell the business to Wesfarmers for GBP340.0 million, having disclosed it was holding advanced talks with the buyer last week. Wesfarmers owns Australian DIY chain Bunnings and intends to rebrand Homebase stores under that name, with an investment of GBP500.0 million to be made in the business over the next three to five years.
Wesfarmers said it expects the deal to complete in the first quarter of 2016 in an earlier statement.
Home Retail confirmed that calendar on Monday morning and said it would return about GBP200.0 million of the proceeds to shareholders, after deducting GBP50 million in pension contributions and GBP75 million in deal and restructuring costs.
"We are very pleased to have reached agreement with Wesfarmers regarding the sale of Homebase. We believe that this is the best deal for shareholders and for the business," said John Coombe, Home Retail's chairman.
"Following completion of this transaction, the board will remain focused on the continuing transformation of our Argos business and the options for delivering shareholder value, supported by a strong overall financial position," Coombe added.
The Argos catalogue retail business is the central interest of J Sainsbury PLC, the FTSE 100-listed grocer, which made a rebuffed bid for Home Retail in November. Sainsbury's has until February 2 to make an offer or walk away from any deal with Home Retail, but it is widely expected it will continue to pursue the Argos unit.
By Sam Unsted; [email protected]; @SamUAtAlliance
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