A global player is seriously interested in the business
Retail analysts claim that global private equity giant Blackstone is said to be sizing up the Masters business, while talk Woolworths is already engaged with a number of parties over the failed hardware chain is humming.
According to the Sydney Morning Herald this week, Blackstone would not comment on what it referred to as “speculation” but it’s understood the investment heavyweight is taking a close look at the Masters properties, as well as the hardware chain.
It’s not clear whether Blackstone’s target is the underlying large-format retail sites or the properties and the hardware business, which hardware analysts suggest could turn a profit with a different brand and product focus.
One retail analyst said the individual Masters properties could easily be carved up into separate retail tenancies by an experienced property operator and run on good yields as small shopping centres.
Blackstone and fellow private equity player TPG were named as potential bidders for Woolworths’ discount department store chain Big W late in 2015 and more recently James Packer reached out to Blackstone Real Estate over the potential privatisation of casino operator Crown Resorts.
The challenge for Woolworths, one analyst said, was balancing the potential return on liquidating the home-improvement operation with the cost of selling it, which would ensure the survival of a competitor for Wesfarmers’ dominant Bunnings chain.
“The question is how much is Woolworths willing to sacrifice to maintain a competitor to Bunnings,” the analyst said.