Mitre 10 seeks more cash to take on Bunnings

Australia’s second biggest hardware chain Mitre 10 is seeking a capital injection or trade sale as it seeks to combat the market power of the Bunnings chain, owned by West Australian conglomerate Wesfarmers.

Australia’s second biggest hardware chain Mitre 10 is seeking a capital injection or trade sale as it seeks to combat the market power of the Bunnings chain, owned by West Australian conglomerate Wesfarmers.

According to The Australian Financial Review, Mitre 10 will meet with its 800 shareholders next week to try to convince them of the need for restructuring.

Woolworths has been holding discussions with Mitre 10 for some time and the prospect of a buy-out is growing. The hardware sector is one area Woolworths could make a deal without the risk of running foul of competition regulators.

But any sale will be complicated by Mitre 10’s operating and ownership structure, which involves 450 franchise owners and a host of former store owners who remain shareholders.

The AFR says any deal would require the approval of 75% of shareholders.

Mitre 10 has been hurt by the huge market power of Bunnings, which has allowed it to tie up exclusive deals with manufacturers such as Ryobi.