In documents filed this week, Lowe’s alleges that Woolworths failed to provide information requested by Lowe’s for their participation in the management of Hydrox, provided Lowe’s with 1000-page documents less than 24 hours before a Hydrox board meeting, required the Hydrox board to deal with resolutions despite Lowe’s nominees having insufficient time to consider them, and made decisions that required the approval of at least one Lowe’s nominee.
Advertisement
Woolworths last week announced three separate contracts to quit the unprofitable Masters hardware division formed with Lowe’s in 2009, including a plan to sell 82 properties and development sites that still needed the USA company’s approval.
The joint venture was formed in 2009 in an attempt to rival the dominant Bunnings chain owned by Woolworths’ supermarket-owning rival Wesfarmers.
“Lowe’s are unhappy with the scorched earth valuation that Woolworths came up with, because Woolworths were very happy to move forward and exit the Masters joint venture”, he told the ABC.
Both parties, Hydrox and Lowe’s, have been ordered to return to court for an interlocutory hearing on 15 September. Woolworths owned two-thirds of the JV and had the right to terminate the venture.
However, Woolworths got the support of David Di Pilla, former investment banker and the brains behind the consortium of private investors which plan to purchase 82 Masters outlets for $750 million.
A Woolworths spokesperson said on Monday, “The transactions relating to the Home Timber and Hardware sale and Masters inventory clearance by GA Australia are proceeding as announced”.
Last week, Woolworth’s announced a $1.2 billion full-year loss, marking its first annual loss in 23 years. Woolworths said on Monday the price cut would be around 30 percent, but the website cites as store employee who said the price cuts were only between 6 and 10 percent.
Advertisement
Lowe’s has applied to have an independent liquidator appointed to Hydrox Holdings, the joint venture company running the soon-to-close Masters hardware stores in Australia.
