And increase Lowe’s stake.
One month before Woolworths decided to wind up its Masters business, it wanted joint venture partner Lowe’s to buy half its stake for $580 million and tried to sell its Home Timber & Hardware business for $100 million more than it was worth.
This information was detailed in court documents obtained by Australian Financial Review released from suppression orders this week.
According to an affidavit signed by Lowe’s assistant general counsel Robert (Trey) O’Neale, Woolworths sent a letter to Lowe’s on December 23, 2015, proposing a draft new business plan that involved selling the Home Timber & Hardware business for $255 million and lifting Lowe’s stake to 66% for $580 million, according to an AFR article.
The estimated price for Home Timber & Hardware was $90 million more than the business obtained when it was sold to Metcash for $165 million in August.
Lowe’s rejected the proposed new business plan and exercised its put option on January 16, 2016, prompting Woolworths to put the business up for sale. It also claims that it was denied information about the deals and decisions were made by Woolworths representatives that required unanimous approval by the Hydrox board.
Woolworths is seeking the matter to go to arbitration. Judge Lindsay Foster has reserved his decision and the case returns to court in October.