Plumbing company Wolseley is targeted in a £600m buyout war

A private equity firm connected to Sir Terry Leahy is in talks to buy one of Britain’s biggest plumbing merchants.

City sources said Clayton Dubilier & Rice – which employs the former chief executive of Tesco as an adviser – is one of three buy-out firms toughing it out in the final stages of an auction for Wolseley UK, which supplies plumbing equipment to the construction industry.

It is believed Wolseley could change hands for between £400million and £600million as part of any deal with a private equity house.

FTSE 100-listed Ferguson, the owner of Wolseley, hired bankers from NM Rothschild to evaluate a sale or demerger of the building products firm as it looks to focus on its American operations.

The move came after feared activist American investor Nelson Peltz built up a 5.9 per cent stake in Ferguson and pressured the blue chip firm to dispose of Wolseley.

Other potential buyers include American company HIG Capital and Epiris, a London-based private equity house that owns the venerable auction house Bonhams.

Epiris also used to own TI Media – publisher of Country Life, Horse & Hound and Decanter magazines – until it sold the business to the London-listed Future earlier this year.

One City source said Clayton Dubilier & Rice is the ‘most keen’ to acquire Wolseley.

Sources said the firms, which declined to comment, were competing with a ‘trade buyer’.

Source: This Is Money