Deutsche Bank analysts are tipping Harvey’s is “most likely” to be taken over by private equity buyers.
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The troubled electronics giant, along with David Jones, were “the most likely to attract private equity interest” given their dismal share price, said analysts, Michael Simotas and Paul van Meurs, this week.
The analysts also said Harvey’s extensive property portfolio could “unlock substantial value” for any potential private buyer considering its massive presence in key retail locations through Australia.
Other analysts are also tipping that the group will be broken up and various divisions sold, saying it has reached the point where it is worth more broken up, leaving management to focus on the retail business.
The takeover could be from US private equity firm KKR, who are already mulling over a purchase of another Australian giant, Pacific Brands.
However, the Deutsche Bank analysts noted one major stumbling block: Gerry Harvey and Ian Norman.
Harvey Norman’s co-founders own half of the shares, and would need convincing about the “merits” of any possible buyout.
And they’re right.
72 year old chairman Harvey has no intention in hell of giving up his prized retail chain and only this week his wife and company CEO, Katie Page, said her other half was as “as vibrant today as he was 30 to 40 years ago,” indicating he has no notion of leaving his beloved company go, any time soon.
Ms Page also indicated a “sit tight” strategy for the first six months of 2012 for Harvey’s while no growth is expected.
JB Hi-Fi was less likely to attract private equity buyers given the less appealing returns on offer, the analyst note also said.
This latest analyst briefing corroborates with intelligence ChannelNews was given last month, which indicated that one private equity group and a large overseas retailer had already reviewed Harvey Norman group with a price of $1.5bn-$1.8 bn purchase price being suggested.

