Homebase on brink of sale as Hilco, Alteri and Endless table final bids

Advisers to Wesfarmers reportedly received the offers on Tuesday and are expected to decide upon a preferred bidder before the weekend.

Sources told Sky News that Alteri, which previously owned Austin Reed, and Hilco, which bought HMV out of administration in 2013, were Wesfarmers’ favourites to buy the beleaguered DIY chain.

A sale to one of the private equity suitors would mark the end of Wesfarmers’ botched foray into the UK market. 

It bought Homebase in 2016 and intended to woo British shoppers with its Bunnings brand. But its changes to the Homebase business, including the removal of its homewares offer, proved unpopular and sent sales and profits tumbling.

A takeover by either Hilco or Alteri could trigger job losses as the firms would reportedly seek to restructure Homebase by closing a number of its 220 stores. The UK DIY chain employs around 11,000 people.

Wesfarmers has been conducting a review of the fledgling business since unveiling a £500m writedown relating to the disastrous acquisition. It said it would update investors with its findings in early June.

Alvarez & Marsal has been working with Wesfarmers on alternatives to a sale of Homebase, including a potential CVA.

The firm is understood to have been lined up to act as an administrator if Wesfarmers is unable to secure a solvent sale of Homebase in the coming days.

Former Comet-owner Opcapita was previously said to be in the running to buy the stricken chain.  

Wesfarmers will reportedly sweeten any deal with a dowry of around £75m.