Duke St threatens to drop bid for Homebase

Click to follow
The Independent Online

Duke Street Capital is threatening to pull out of the bidding for Sainsbury's Homebase DIY business, due to frustration over the way the process is being handled.

Duke Street Capital is threatening to pull out of the bidding for Sainsbury's Homebase DIY business, due to frustration over the way the process is being handled.

Duke Street, the venture capital firm that controls Focus Do It All and which last week completed the takeover of Wickes, tabled a bid of about £1bn for Homebase by Friday's deadline. However, venture capital sources say Duke Street has become frustrated with delays to the process, which is being handled by UBS Warburg. It is thought Duke Street is also disappointed with the quality of information on trading being provided. This has led to fears that the stores' performance is deteriorating.

Duke Street Capital would only say yesterday that it was "considering its options". A spokesman for UBS Warburg denied there were any problems. "We always indicated it would take to two three weeks from the bid deadline to announce something definite. Everything is going to plan." A spokeswoman for Sainsbury's said: "We always said it [the process] would run through October. There will be an announcement in a few weeks' time."

Duke Street Capital has been considered the front runner in the race for Sainsbury's DIY business. Other bidders were thought to be Leroy Merlin of France and Kohlberg Kravis Roberts, the American leveraged buy-out specialist. Charterhouse Development Capital expressed an early interest and succeeded in attracting former B&Q boss Jim Hodkinson to lead its management team. However, it later pulled out

Industry experts say Duke Street is in a position to offer a higher price as its control of Focus Do It All and Wickes would give it greater synergy benefits. Sainsbury's announced in August that it was reviewing the strategic options of Homebase. It said the possibilities included an alliance, joint venture or disposal - though the City took the view that a sale was the likely outcome.

Meanwhile, the major supermarkets remained on tenterhooks last night as they waited for the Competition Commission report into supermarket profits which is expected to be published "any day".

Comments