Wesfarmers has asked potential bidders for its Homebase chain to submit initial takeover bids today.
According to Sky News, the bidders could be enticed with a huge dowry for the business, as Wesfarmers looks for a speedy exit out of its role as Homebase’s parent company.
Sources close to Wesfarmers have said the business is putting together a large financial package to hand to any new owner, to help content with Homebase’s losses.
Although the value of the dowry has not been finalised, it is thought it could easily exceed £100 million.
Wesfarmers acquired the DIY chain in 2016 for £340 million.
Homebase has since reported a £97 million trading loss for the second half of 2017, with Wesfarmers forced to write-down the value of its UK business by £550 million.
The UK retailer is now expected to lose approximately £190 million in the current financial year on revenues of roughly £1 billion, according to sources close to the business.
Sky News reported that restructuring specialist Alvarez & Marsal has been drafted in to advise Wesfarmers on alternatives to a sale, including a mechanism that would see it closing scores of Homebase outlets.
A Company Voluntary Agreement could also be on the cards.
The news comes as Homebase enlisted the help of specialist consultancy firm Boston Consultancy Group as Wesfarmers looks to abandon its accession in the UK.