The industry is still waiting to see if anything comes of rumors that Atlanta-based Home Depot Inc., the nation's No. 1 home improvement retailer, may buy Hughes Supply Inc., Orlando, Fla.
Hughes Supply said it was looking at “strategic alternatives” to maximize shareholder value. That announcement followed speculation that Home Depot was looking at buying Hughes.
In a press release dated Oct. 31, Hughes said it had formed a special committee of independent directors to seek alternatives to help raise Hughes' profile.
“There are, of course, a multitude of ways to maximize the company's potential and enhance shareholder value,” said President and CEO Tom Morgan in a statement. “After considering various factors, including our company's continued strong performance, our enviable market position and product portfolio, and the acceleration of industry consolidation, the board unanimously determined that now is an appropriate time to evaluate all strategic alternatives.”
A spokeswoman for Hughes Supply said it was the company's policy not to comment on rumors, but talk of a Home Depot bid had been out there for years.
According to Baird analyst David Manthey, strategic alternatives for Hughes include staying the course, staying the course with a divestiture, going private, or merging. “That's the entire range of possibilities for the company from here,” he said.
In other news, Hughes Supply recently announced a multi-year, strategic partnership with Equity Residential, the largest publicly traded owner, operator and developer of multifamily housing in the United States.
Hughes, with more than 500 locations in 40 states, made more than $123 million last year on sales of $4.42 billion. The company's electrical division ranked eighth on Electrical Wholesaling's Top 200 listing in 2005. The electrical business accounted for about 10 percent of Hughes' 2005 overall sales.