WE HEAR: NOW WESFARMERS IS BUYING HOMEBASE?

By NZHJ January 14, 2016 International News

Sainsburys may be sniffing around Home Retail Group, but the latest news suggests it's Wesfarmers that wants to take Homebase off HRG's hands.

There has been much news coverage around J Sainsburys' interest in taking over the UK's Home Retail Group (HRG) with its Argos and Homebase banners. (Incidentally, Homebase was originally created by Sainsburys in the 1980s.)

HRG hasn't been keen on the the idea or the price offered so far (see here) but now there's another variable and it's that Aussie giant Wesfarmers has officially entered the scene and is targeting just the Homebase network.

According a news item posted yesterday on the ASX website (see here), as well as other reputable sources, talks are "advanced" and that the two parties are "currently finalising transaction documentation" with the caveat that this doesn't necessarily mean the offer will be found acceptable.

Selling Homebase to the owner of Bunnings would leave HRG free to concentrate on and maximise the positive progress it's been seeing as it continues to work on revitalising its Argos banner.

Homebase itself has been seeing tough trading in the last few years (see the last year end report here). It trails B&Q and the fast improving Wickes and, like B&Q, is undergoing a radical 3-year programme including store closures designed to return it to profitable status.

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