Acquisition of Homebase

The British DIY chain Homebase is being sold to Great Universal Stores (GUS) at a price of around £ 900 mio (€ 1.415 bn) and will become part of the group’s Argos Retail Group (ARG). The current majority shareholder is the investment company Permira. ARG is pursuing a strategic goal of expansion in the furniture and homewares markets. It announced sales of more than £ 1 bn (€ 1.6 bn) in these markets for the year ending March 2002 and average growth of twelve per cent in the past two years. Homebase sales of these ranges are put at £ 250 mio (€ 393 mio) and growth at 18 per cent. In the last financial year (ended February 2002) Homebase achieved an operating profit of £ 86 mio (€ 135 mio), and a figure of £ 100 mio (€ 157 mio) is forecast for the current year. The company is to retain its brand identity. Terry Duddy, chief executive of ARG, will become chairman of Homebase. The current head of Homebase, Rob Templeman, will remain in office until April 2003. Further information indicates that other top managers will remain with the company. Sainsbury, the former parent company of Homebase, is also selling its remaining 17.3 per cent of Homebase shares in return for a sum of £ 139 mio (€ 218 mio). Consequently the total price achieved by Sainsbury from the sale of Homebase adds up to more than £ 1 bn (€ 1.6 bn).