The deal Bunnings should be worried about

THE days of Bunnings’ reign could be numbered, with reports of a private equity deal set to shake up the $46.7 billion home improvement sector.

Dogs in Bunnings

THE days of Bunnings’ reign could be numbered, with reports of a private equity deal set to shake up the $46.7 billion home improvement sector.

Rumours have been swirling about a potential merger of Metcash-owned Mitre 10 and Woolworths’ Home Timber & Hardware, which could put the fire under DIY powerhouse Bunnings.

And now it’s looking like the private equity firm behind Dick Smith’s controversial $520 million sharemarket float could be doing just that.

Fairfax reports that Anchorage Capital Partners has taken the merger proposal to Metcash, whose share price has spiked by 86 per cent in anticipation.

Whispers had been heard of a potential deal between Metcash and Woolworths since the latter abandoned its failed hardware experiment, Masters, in January.

There was talk of a potential merger of Home Timber & Hardware and the better-performing Masters stores.

A marriage of Home Timber & Hardware and Mitre 10 has been hailed by some as a powerful combination, but taking on Bunnings — which raked in $9.5 billion in 2015 — would still be a challenging proposition.

That other January retail collapse, Dick Smith, put the spotlight on Anchorage over its IPO, dubbed the ‘greatest private equity heist of all time’.

Anchorage had bought Dick Smith from Woolworths for $20 million and made $500 million after listing it on the stock exchange nine months later, prompting finger-pointing when the electronics retailer subsequently went into administration.

Businessman Dick Smith labelled the deal “greedy”, “dishonest” and “immoral”, but Anchorage founder Phillip Cave last week leapt to his company’s defence.

Mr Cave told the Daily Telegraph the firm had made “a significant investment in staff, stores, marketing and the operating systems” before floating Dick Smith.

He declined a Fairfax request for comment on Mitre 10 and Home Timber & Hardware.