The consumer watchdog the ACCC (Australian Competition and Consumer Commission) has decided not to oppose JB Hi-Fi’s possible acquisition of the Good Guys stores.
JB Hi-Fi says it continues to participate in the sale process, but has not entered into any agreement with the Good Guys.
“JB Hi-Fi understands that the Good Guys are looking at a range of options including an IPO on the ASX,” the company said.
The ACCC says JB Hi-Fi and the Good Guys generally focus on different product categories and customers.
“JB Hi-Fi has traditionally focused on selling consumer electronics, with stores located mostly in shopping centres or CBDs,” says ACCC Chairman Rod Sims.
“On the other hand, the Good Guys has mostly focused on whitegoods and other home appliances, with stores generally located in home centres or similar locations.”
Sims says other retailers such as Harvey Norman have a much higher degree of overlap with the Good Guys than JB Hi-Fi.
There have been reports that Harvey Norman could also be interested in the Good Guys.
At the same time as it’s talking to potential trade buyers, the Good Guys is moving toward a float on the ASX later this year. The IPO is expected to be priced at between $800 million and $1 billion.
The chain, controlled by the Muir family in Victoria, last month bought back the 56 joint venture stores it had with local managers in preparation for an IPO.
The company, with annual sales of $2 billion and staff of 3500, can now go to a float with 101 fully-owned stores, plus any it launches between now and listing.
The Good Guys has said it is ready to hear other offers but it appears that, so far, none have been better than the prospect of a float.
A JB Hi-Fi deal with the Good Guys would instantly create a business with sales of almost $6 billion and almost 300 stores.
There are also reports of interest from private equity groups and Steinhoff International, the owners of Freedom Furniture stores.