Harvey Norman has emerged as another retail chain with its eyes on The Good Guys.
Chairman Gerry Harvey says he’s always assumed the competition watchdog, the ACCC, wouldn’t allow Harvey Norman to buy the privately owned The Good Guys.
The billionaire was speaking after JB Hi-FI revealed that it was negotiating with The Good Guys to create a business with 300 stores and almost $6 billion in sales.
Harvey Norman is the biggest player in the home appliances sector with about 15% of the market. A JB Hi-Fi hookup with The Good Guys would challenge that position.
“If there is an argument they (JB Hi-Fi) could buy it, then equally there is as good an argument that we could buy it,” Harvey told Fairfax Media. “I would seriously look at it if I could get clearance from the ACCC.”
Harvey told The Australian newspaper he’ll probably look at a bid, contacting the ACCC to say: “I would be interested in The Good Guys.”
The price for The Good Guys would be less than $1 billion but it could be more, depending on how big a premium a buyer is prepared to pay to close a deal with the Muir family which controls The Good Guys.
The Good Guys is understood to be looking at a range of options including an IPO on the ASX.
Harvey Norman’s latest half year results show sales for the six months of $3.33 billion.
Adding in around $2 billion a year from The Good Guys would create an $8.6 billion a year combined business.
A deal withe JB Hi-Fi would bring combined sales of almost $6 billion and create a major competitor to Harvey Norman.