By James Wells
PERTH: Retravision Western CEO Paul Holt has dumped a potential national merger of the three regional divisions of the electrical chain indefinitely due to “insurmountable corporate, legal and financial issues”.
A merger of the Retravision Western, Southern and Northern businesses, collectively turning over $1.3 billion, has been mooted recently following the defection by the $130 million RT Edwards business to South Australian-based Radio Rentals, which is part of the $3 billion Narta group.
Holt informed his top 10 major suppliers and shareholders of the decision with a letter on Wednesday 24 September titled “Strategic Direction – Retravision Western”, which has been obtained by Current.com.au.
“You will recall that we recently discussed the above at a meeting of shareholders on 8 September (and at recent dealer meetings) and advised that we were considering a Nationalised Retravision solution (amalgamating our business with those on the eastern seaboard) as a strategic option for our company,” Holt said in the letter.
“Following deep consideration by our Board of Directors, we have concluded that this solution is not in the best interests of a sustainable business model in the Western region and, yesterday, we formally advised the Boards in the Southern and Northern regions that we are deferring the option of Nationalisation indefinitely.
“This decision has been taken because of what we see as insurmountable corporate, legal and financial issues existing between each of the regional businesses.
“Accordingly, we will now proceed to consider how best we drive our business regionally to ensure sustainable business growth and profitability.
“Please be assured that we will continue to work closely with our east coast partners to leverage the value of our combined order book wherever possible to our mutual benefit, whilst we consider the best way forward for our organisation.”
On the day he sent the letter to shareholders advising there would be no merger with Retravision Southern and Retravision Northern, Holt was quoted in The Australian Financial Review as “considering various options” regarding a potential merger.
“It’s fair to say in the light of the exit of the Edwards business we continue to consider our options and clearly the option of working together as a more coordinated national group remains a possibility,” Holt said in the article.