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The rumour mill gets busy

Some people will believe anything if you whisper it to them.

Where would this industry be without the grapevine? There’s nothing that binds people together – and I mean blokes just as much as girls – like a good old gossip.

And the gossip for the last year or so has been about Wolseley and when/if/whether it would off-load Build Center and any other of its businesses that haven’t been performing to standard.

According to press speculation this weekend – and Wolseley tells me that at this stage it is still “just speculation” – that hour has come.

According to the papers, Build Center, Encon and Electric Center are being put in the hands of an American bank to handle the sale of the businesses.

This topic has been visted in these pages time and again. And the question still is, who would want to buy these businesses? Well, just about everyone who’s anyone will have good old look at it, I’m sure.

Take your pick: Travis Perkins, Saint Gobain, Grafton, SIG, CRH, groups of individuals backed by private equity….I’ve heard talk of all of these and more. And a lot might depend on whether Wolseley would be prepared to sell off some of the better performing branches at a premium. There are branches of Build Center out there that would fit very nicely into current portfolios, but there are also branches that aren’t doing so well, for any number of reasons.

What’s more likely is that any buyer would probably have to take the whole thing and then we would see a disposal of branches that don’t fit into the buyer’s plans.

Encon too, would fit nicely within a number of other businesses, although it might not get passed the OFT should SIG be in the frame.

No matter what happens, we will only find out for sure when the deal is done and it has to be that way for all sorts of stock-exchange related reasons (Grafton’s share price has already received a bit of a fillip because some hack on the Irish Times though they might be in the frame).

However, having been in a similar situation myself, I can only feel for the people at the coalface who are doing their best to do their jobs in what has been some very trying times.

Watch this space – again.

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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