Home Retail Group has announced it will be returning £200m to shareholders, following the sale of its Homebase chain to one of Australia’s biggest listed companies.
The British retail group has confirmed reports it will sell the DIY chain to Australian Wesfarmers for £340m.
Wesfarmers, which already owns DIY supplier Bunnings, said it will spend another £242m to build up Homebase under the Bunnings brand.
Home Retail Group chairman John Coombe said in a statement he was “very pleased” to have reached this agreement:
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.
Following the deal, Home Retail Group will return net cash proceeds totalling around £200m to shareholders.
The deal, which marks Wesfarmers' first foray into the UK, came as Sainsbury’s prepares a takeover of Home Retail’s high street business Argos, with a formal offer due within weeks, and analysts suggest that the Wesfarmers deal has removed significant hurdles.
Home Retail Group shares, which had been ailing until the talks were made public, rose 2.4 per cent in early morning trading on the news.