Private equity firms eyeing bid for Homebase

Several private equity firms are eyeing a potential bid for DIY chain Homebase, according to reports.
The company's Australian owner began approaching potential buyers last week, just two years after completing a troublesome €340m takeover.
Hilco, Endless and Lion Capital are among the groups considering a bid, with bargain retailer B&M also eyeing an approach.It is not yet clear whether any bid would be for all of the business, part of it, or, in B&M's case, a chunk of the chain's store estate.Sky News reported last week that current owner Wesfarmers was working with investment bankers at Lazard to review options for the future of Homebase, with the most likely outcome being an outright sale of the business.Lazard has contacted a range of potential new owners in the last couple of weeks, banking sources said last weekend.Homebase employed nearly 12,000 people in Britain across an estate of almost 250 stores at the end of last year.The move to unwind Wesfarmers' takeover of the UK's second-biggest DIY chain comes less than three months before the Sydney listed company is due to update investors on the results of its strategic review.
Executives have already pledged to axe up to 40 underperforming stores, and a Company Voluntary Arrangement (CVA) paving the way for ‎closures and rent reductions at others is also a possibility.Operating under the Bunnings name in its home market, Wesfarmers had grand ambitions to take on B&Q in Britain when it bought Homebase from Home Retail Group, the then owner of Argos.Argos was subsequently snapped up by J Sainsbury, the UK's second-biggest supermarket chain.However, Wesfarmers' strategy has backfired spectacularly in the last 18 months‎, forcing it to write off more than €500m after it ditched some of Homebase's most popular business lines.
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It ditched the chain's British management team, replacing them with an Australian leadership line-up which presumed the UK market would welcome the radically different Bunnings Warehouse‎ retail model.Its sales performance since the deal has produced the opposite result, with the British and Irish division reporting a 15.7%‎ slump in revenue and a €97m loss before tax.
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