Homebase to be acquired by Wesfarmers
Home Retail Group has entered into a share purchase agreement to sell Homebase to Wesfarmers subsidiary, Bunnings (UK&I) Holdings, for £340 million.
In a statement, Home Retail Group said the transaction represented good value for shareholders and will enable the group to focus on the ongoing transformation of Argos.
Home Retail Group intends to return net cash proceeds of approximately £200 million to shareholders, after taking account of payments totalling £50 million to the Home Retail Group Pension Scheme, and transaction, separation and restructuring costs of approximately £75 million.
John Coombe, chairman of Home Retail Group, said: "Wesfarmers is an experienced and successful retailer with exciting plans to invest in and grow their presence in the UK through Homebase. This transaction crystallises value for our shareholders from our ownership of Homebase and specifically the work that we have been doing through the Productivity Plan. 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."
The transaction is subject to approval by the syndicate of banks that provide the Home Retail Group's revolving credit facility of £250 million, and the group's shareholders. The deal is expected to complete in the first calendar quarter of 2016.