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Report: Harvey Norman eyes Noel Leeming

Report: Harvey Norman eyes Noel Leeming

New Zealand’s largest consumer electronics retailer, Noel Leeming, could be bought by rival Harvey Norman, according to reports in the Australian Financial Review (AFR).

In an article published today, the newspaper, a sister publication of Reseller News, reports Australian-based Harvey Norman Holdings is assessing a potential A$300 million (NZ$340m) acquisition of the Noel Leeming Group.

The group’s owner Gresham Private Equity has reportedly also tested the interest of two other Australian companies, Woolworths and JB Hifi, as buyers, in the past few weeks.

Private equity groups such as Gresham, which has been Noel Leeming Group’s majority owner since August 2004, traditionally hold assets for three to five years before making a trade sale or public float, the AFR article says.

The Noel Leeming Group, which incorporates the Bond and Bond brand, has over 80 stores in New Zealand, while Harvey Norman has 26 here and over 174 across Australia.

If an acquisition went ahead the combined New Zealand market share of the new chain of up to 52 percent could mean Harvey Norman runs into problems with the Commerce Commission, the AFR reports.

The AFR states Gresham Private Equity managing director Roy McKelvie denies a formal sale process is underway, but that it would sell if the price was right.

“If someone came along and offered a big price we would then look at selling it,” he was reported as saying.

In its recent annual report, Harvey Norman executive chairman Gerry Harvey said the company was “investigating other retail opportunities in the New Zealand market”.

JB Hi-fi chief executive Richard Uechtritz said his company was not in discussions with Gresham, the AFR reports.

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