Wesfarmers entices Homebase bidders with £100m dowry

Potential bidders for Homebase are being enticed by a sizeable dowry as its owners Wesfarmers ask for initial takeover bids to be submitted by the 23 April.

The Australian owners of the DIY chain are looking for a fast exit from the UK market and sources close to Wesfarmers say it is assembling a large financial package to hand to any new owner to help contend with its losses.

The exact figure of the dowry offered has not been finalised however it is reported that it could easily exceed over £100m. According to the source Homebase is expected to lose approximately £190m in this financial year on revenues of around £1bn.

Reports said restructuring specialists Alvarez & Marsal have been appointed to advise on possible alternatives to a sale with closures of some of the 250 Homebase stores a possibility.

Wesfarmers acquired Homebase only two years ago for £340m with plans for repackaging the store under its Bunnings brand. So far only 25 stores have undergone re-branding.

The news comes only a week after the DIY retailer called in specialist consultancy firm Boston Consultancy Group to help advise its UK leadership on the strategic review of the business scheduled for June this year.

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