Discount retailer The Warehouse and Australia's Miller's Retail are reportedly holding talks about a merger and sale of their Australian discount store chains.
The Australian newspaper today reported about four private equity firms were looking at The Warehouse's approximately 130 "Yellow Shed" outlets in Australia's eastern states and Miller's more than 300 Go-Lo and Crazy Clark's stores.
The Warehouse was believed to have approached Miller's with a proposal for the two companies to package their discount variety operations in Australia for a single trade sale, The Australian reported.
The Warehouse was believed to have started talks with private equity firms - Allco Equity Partners, Castle Harlan Australian Mezzanine Partners, Archer Capital and Catalyst -- to buy the merged business.
Analysts believe the network of the more than 400 stores could be about A$300 million ($330.79 million).
In March, Warehouse investors were cheered by signs of a turnaround at the stubbornly unprofitable Yellow Sheds.
Warehouse shares traded as high as $7.90 in 2002 before falling on a series of profit warnings and poor results, more often than not related to ongoing problems in Australia.
This morning they were 20c higher at $3.60.
The Warehouse today confirmed it is reviewing its Australian operations, and is in discussions with a number of parties -- including Miller's.
"Discussions with these parties are preliminary in nature," The Warehouse said.
"It would be premature to speculate on any outcome."
- NZPA
Warehouse reportedly looking to offload Aussie outlets
AdvertisementAdvertise with NZME.