Blackstone still in Masters race after legal stoush

New York-based private equity firm Blackstone may look to profit from the legal dispute between the US hardware giant Lowe’s and its joint venture partner, Woolworths, as debate rages over whether the disagreement will derail the sale of the DIY retailer Masters.

Blackstone contested the race for Masters, offering to buy all the real estate and lease liabilities and bundle the assets in to one vehicle.

It is not clear how much the firm offered for the assets but the value is believed to be over $700m.

Lowe’s familiarity with Blackstone — the private equity player controls a vast retail empire in the US — helped build expectations it could achieve a competitive edge.

Instead, the private equity behemoth was pipped to the post by the ex-UBS banker, David Di Pilla, and his consortium of wealthy investors that include the families behind retailer Spotlight, Chemist Warehouse, as well as the Salteri clan.

While Woolworths and Di Pilla argue Lowe’s action presents no threat to the sale of 81 Masters properties, others are questioning whether Blackstone can stage a comeback.

Di Pilla’s camp, however, remains unfazed about the latest legal developments and views the action as an attempt to extract greater value from the disastrous home improvement joint venture.

The ex-banker’s group has a call option over Woolworths’ 66 per cent of Hydrox Holdings, the vehicle that holds both Masters and Home, Timber & Hardware.

The key question for Blackstone, which is watching events closely but has yet to re-engage with Woolworths, is whether Lowe’s can block 100 per cent of Hydrox’s sale or just its 33 per cent holding.