Wesfarmers' investor rationale for buying Homebase includes some key personnel changes - and a further billion dollar-plus investment.

Along with the announcement that the Board of Home Retail Group had approved its AU$705 million bid for Homebase, Wesfarmers released its rationale around the purchase which includes details of a new post-purchase management structure that will be put in place at Bunnings.

John Gillam (shown above - currently MD of Home Improvement and Office Supplies) will be Chief Executive Officer of Bunnings, with management teams allocated against the two distinct operational regions.

The key senior leadership appointments within the new Bunnings structure are:

Bunnings Australia and New Zealand:

• Mike Schneider, Managing Director (currently Director of Store Operations).
• Clive Duncan, Chief Operating Officer (currently Director of Merchandising & Store Development).
• Justin Williams, Chief Financial Officer (currently General Manager Information Technology & Financial Services).

Bunnings UK and Ireland:

• Peter (PJ) Davis, Managing Director (currently Chief Operating Officer).
• Rodney Boys, Finance Director (currently Chief Financial Officer).

One other point of interest is the stated level of investment that has been budgeted over and above the purchase price.

Wesfarmers says it will put AU$1.037 billion into Homebase to build a new Bunnings-branded business over 3-5 years which "will combine essential local elements with the best of Bunnings to bring customers in the UK and Ireland an exciting new home improvement and garden offer.”

At the last count (YTD to 2 January 2016), although like for like sales rose 5.4%, Homebase's total sales had fallen by 2.8% to £1.25 billion, reflecting 31 store closures over that period. In other words, Bunnings has its work cut out.

The new Bunnings UK & Ireland MD, Peter Davis, is shown below.