Homebase owner Wesfarmers has offered a sizeable incentive package to potential investors as it continues frantic efforts to offload the beleaguered DIY chain.
According to Sky News, buyers were asked to submit their offers by Monday, April 23, but have been offered a dowry, said to be worth as much as £100 million, to help offset the huge losses that Homebase is thought to have built up.
Sources claim the multiple is expected to lose between £160m and £180m during the current financial year ending June 30.
Restructuring specialists Alvarez & Marsal have been appointed to advise Wesfarmers on alternatives to a sale, which are said to include the closure of many Homebase stores.
Wesfarmers bought Homebase in January 2016 for £340m and had planned to rebrand all of the Homebase stores as Bunnings. To date, 15 stores have already been rebranded.
In February, Wesfarmers managing director Rob Scott said the group had written down the value of the Homebase chain by £454m due to poor trading results.
The group was expected to announce its future plans for the business on its annual Strategy Day in June. However, poor weather in February and March has resulted in a further decline in sales, which were previously down 15% year on year, which has damaged any interest in keeping the business.
Scott admitted that the previous management team, in the early days of the takeover, which was led by Peter ‘PJ’ Davis, had “made mistakes”.
“A lot of the issues we are dealing with today, to be frank, were self-induced,” he said.