True Value: reports and rumors

Co-op competitors react to reports of a possible sale of the Chicago-based hardware company.

True Value Company's headquarters in Chicago.

Since reports began to swirl around a possible sale of True Value Company -- or at least the consideration of such a move – the Chicago-based co-op’s CEO has downplayed the story as “rumor.”

But that hasn’t stopped rival co-ops from weighing in with their own statements. Cross-town rival Ace Hardware Corp. says it would be interested in bidding on True Value, if it were possible. And Fort Wayne, Indiana-based Do it Best Corp. says it is “considering the opportunities potentially available with our competitor,” as it pointed to its own past success in merging with Our Own Hardware in 1998.

The possibility of a sale of True Value, along with a possible sale price of $800 million, first appeared in a Bloomberg News report last week.

John Hartmann, True Value’s president and CEO, downplayed the reports of a sale in a statement that was shared on a popular Google Group comment board.

“The bottom line is this: you and your fellow stockholders own the company and nothing could be done without your say,” he wrote.

Hartmann also described the True Value co-op as committed to its strategic plan, which the co-op has been busy shaping and executing since his arrival at the company in 2013. “As part of that [plan] we are continuously assessing and evaluating many opportunities in an effort to create maximum value for all of our retailers,” he said.

Speculation that Ace might acquire its cross-town rival appeared in the Chicago Tribune. However, that speculation appears to rest on flimsy ground. Ace CEO John Venhuizen, in an online statement to Ace retailers, said it was his understanding that “Ace was specifically precluded from making a bid to purchase True Value, which is unfortunate as we would have been interested in the opportunity.”

Do it Best Corp. President and CEO Dan Starr also weighed in on the potential sale of True Value. “We are certainly considering the opportunities potentially available with our competitor,” he wrote in a July 14 statement. One of those opportunities, according to Starr, would be to take on new members.

[Read Starr’s full statement here.]      

At last count, True Value stores numbered 4,392. The co-op operates 13 regional distribution centers and has 2,500 corporate employees.

Other speculation in national media has suggested private equity players, big box retailers and Amazon.com as potential possible buyers. These possibilities have yet to rise above the status of rumor.

With so many independent businesses involved, it’s likely that rumors will continue to cloud the retail landscape. As True Value’s Hartmann explained in the post that appeared online: “Rumors have been swirling around True Value for longer than I have been here.”

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