Australians to buy Homebase for £340m
Argos owner Home Retail Group, which is being pursued by supermarket Sainsbury's, has agreed to sell DIY chain Homebase to Australian conglomerate Wesfarmers for £340m.
The Australian supermarkets-to-industrials firm said it plans to rebrand Homebase's 265 UK stores under the Bunnings fascia, its domestic DIY chain. There are nine Homebase stores in Northern Ireland.
Home Retail said it expects to complete the deal, subject to shareholder approval, in the first three months of this year.
John Coombe, chairman of Home Retail, said: "We believe that this is the best deal for shareholders and for the business.
"Wesfarmers is an experienced and successful retailer with exciting plans to invest in and grow their presence in the UK through Homebase."
Wesfarmers has a market valuation of almost £22bn, and is the largest private sector employer in Australia, with around 210,000 staff.
Wesfarmers managing director Richard Goyder said: "The £38bn UK home improvement and garden market is a large and growing market, with strong fundamentals.
"The opportunity to enter this attractive market through the acquisition of Homebase has been comprehensively researched and carefully considered by Wesfarmers and Bunnings." Wesfarmers said that it planned to spend £500m to transform the business from Homebase to Bunnings over the next three to five years.
The sale comes after Sainsbury's revealed earlier this month that it had made an initial approach for £1.3bn-rated Home Retail, which was rebuffed in November.
The supermarket has until February 2 to make a formal offer for the group.