This article is from the Australian Property Journal archive
WOOLWORTHS’ expensive experiment to take on Bunnings Warehouse has ended with the retail giant selling the hardware business and properties for $1.5 billion.
Masters will cease trading at all stores on or before 11 December 2016 after Woolworths announced it would offload the Masters business in three deals valued at a total of $1.5 billion.
Under the deal, 82 properties occupied by Masters will be sold to the Home Consortium, which comprises Aurrum Group, Spotlight Group and Chemist Warehouse. The transaction includes 40 Masters freehold trading sites, 21 Masters freehold development sites and 21 Masters leasehold sites.
Home Consortium plans to repurpose the former Masters sites into multi-tenant large format centres.
Meanwhile Woolworths will acquire three Masters freehold sites and take assignment of 12 leases.
In separate deal, Metcash will acquire the Home Timber & Hardware Group (HTHG) for $165 million, merging it with Mitre10, taking its stores to over 900 across Australia.
Finally GA Australia, part of the Great American Group, a wholly-owned subsidiary of B.Riley Financial, has agreed to buy the Masters stock and inventory for $500 million.
Woolworths expects to realise combined gross proceeds of $500 million from the three deals, prior to any shareholder payments.
“When I was appointed CEO in February, I said exiting the Home Improvement business was a top priority,” Woolworths CEO Brad Banducci said.
“Today’s announcement delivers on that commitment. These agreements are the result of an intensive seven month process of reviewing all possible options for exit and extensive negotiations. This decision means management can focus on driving the momentum in our core businesses,” Banducci said.
Banducci said Woolworths has exercised its right to terminate the joint venture agreement with Lowe and WDR, and the associated option contracts arising under the JVA, as a result of a dispute about the process to value Lowe’s shareholding under the option mechanism in the JVA.
“The confidentiality provisions in the JVA survive termination of the JVA and accordingly no further comment will be made about any dispute between the shareholders,” he concluded.
Australian Property Journal
