SYDNEY, AUSTRALIA – Lowe’s Companies, Inc. (NYSE:LOW) today filed a motion requesting that the Federal Court of Australia appoint a liquidator to oversee the equitable and orderly wind up of the Masters Joint Venture vehicle, Hydrox Holdings, as part of a liquidation process that has been initiated by Woolworths. Lowe’s also alleges that Woolworths has conducted the affairs of Hydrox in a manner oppressive and unfairly prejudicial to Lowe’s, including by wrongfully and in bad faith seeking to terminate its joint venture agreement and by seeking to exclude Lowe’s from the management of Hydrox.
The Joint Venture (JV), formed in 2009, operates the Masters Home Improvement stores and the Home Timber and Hardware Group’s retail stores and wholesale distribution in Australia. Lowe’s owns one-third of the JV and Woolworths owns two-thirds as well as controlling the Board of Directors and day-to-day operations.
Despite every effort to reach a fair resolution with its JV partner, Lowe’s has been left with no other option but to seek the guidance of the court to achieve an equitable and orderly wind-up of the Masters business. Lowe’s has acted in good faith at every stage in both the development and operation of Masters, and has been at all times an engaged investor, a committed partner and proud employer. On the other hand, Woolworths has engaged in oppressive conduct, including by invalidly and in bad faith attempting to terminate the JV.
As previously announced, Lowe’s notified Woolworths on Jan. 15, 2016, of its intent to exercise its put option held under the JV arrangement. Woolworths is contractually obligated to pay to Lowe’s the fair value of its ownership stake as of Jan. 18, 2016, and has disclosed this to the market.
On Jan. 18, 2016 Woolworths’ Chairman Gordon Cairns announced to the ASX “an orderly prospective sale or windup of the business.”
Lowe’s Companies, Inc. (NYSE: LOW) is a FORTUNE® 50 home improvement company serving more than 17 million customers a week in the United States, Canada and Mexico. With fiscal year 2015 sales of $59.1 billion, Lowe’s and its related businesses operate or service more than 2,355 home improvement and hardware stores and employ over 285,000 employees. Founded in 1946 and based in Mooresville, N.C., Lowe’s supports the communities it serves through programs that focus on K-12 public education and community improvement projects. For more information, visit Lowes.com.