Home Retail Group has pledged to return £200m to shareholders as a result of its disposal of the Homebase DIY chain.

The British group has agreed to sell Homebase to Wesfarmers, the Australian conglomerate, in a £340m deal.

As a result, it said it would:

return net cash proceeds of approximately £200m to shareholders, after taking account of payments totalling £50m to the Home Retail Group Pension Scheme, and transaction, separation and restructuring costs of approximately £75m.

Chairman John Coombe added:

We are very pleased to have reached agreement with Wesfarmers regarding the sale of Homebase. We believe that this is the best deal for shareholders and for the business. Wesfarmers is an experienced and successful retailer with exciting plans to invest in and grow their presence in the UK through Homebase.

However, it warned that the loss of Homebase could mean that its remaining operations – the Argos retail chain – could suffer an operating loss of around £10m if the chance to sell Argos goods in Homebase stores was lost.

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