Wickes Weighs Making Offer for Grace Stores : Several Bidders Seen for Ole’s, Other Retail Units
Wickes Cos., the Santa Monica-based parent of Builders Emporium, said Wednesday that it is examining the “desirability of making an offer” for a portion of W. R. Grace & Co.’s home improvement retailing operation.
The company issued the statement after being advised by the American Stock Exchange that there was speculation that Wickes was about to make an offer. Wickes stock rose 50 cents a share to $5.50 Wednesday on a volume of more than 5.4 million shares.
W. R. Grace, a New York-based chemical giant, owns a retail empire of 660 stores, including 307 home center stores operated under the Ole’s, Channel and Handy City names, among others. Wickes said it has not decided whether to make a bid for any of those stores and added that it “understands that many other people have also indicated an interest” in the operations.
One of them, according to National Home Center News, a trade publication, is Harold Geneen, former chairman of ITT, who reportedly plans to mount a $700-million bid for Grace’s retail operation.
Leveraged Buy-Out Considered
In addition, the publication has quoted Sean Lee, president and chief executive of Grace Home Centers West, a 91-unit division based in Diamond Bar, as saying that he and other executives might attempt a leveraged buy-out of that unit. It operates 65 Ole’s Home Centers in Southern California, Nevada and Arizona.
For the fiscal year ended Sept. 30, 1985, Grace had sales of $7.1 billion, with the retail operation accounting for just over $2 billion. The 307 home improvement stores reportedly account for about three-quarters of the retail group’s revenue.
For the year ended Jan. 26, 1985, Wickes had sales of $3 billion, with its 335-store lumber and building materials segment, including Builders Emporium, accounting for $1.458 billion.
In a development that a Wickes spokesman said is unrelated to the company’s consideration of the Grace stores, Hal Smith, president of the 66-store Builders Emporium unit, unexpectedly announced his resignation Feb. 24. Smith joined Ernst Home Centers, a 73-unit chain in Seattle.
The spokesman said that, until a replacement can be found, the president’s duties are being assumed by an executive committee consisting of Phyllis Friedman, vice president and general merchandise manager; Ronald Maccarone, vice president and controller, and Richard Ballone, vice president-operations.
