London, England, Aug. 3--Deutsche Bank has reported that Home Depot Chairman, President and CEO Bob Nardelli has met recently with Kingfisher's head Gerry Murphy about acquiring the London-based home improvement retailer, according to a report in Atlanta Business Chronicle.
The analysts in the report say they do not believe a deal between the two is imminent, but the combination could eventually happen in the mid- to longer-term.
"We believe it makes sense to take a look at Kingfisher to see what Home Depot would be buying and what the potential implications" for the Atlanta-based home improvement giant would be, the report says.
The report also noted: "Key takeaways include smaller stores, lower sales productivity and ROA for Kingfisher versus Home Depot, but higher earnings growth, comps, and margin expansion. Moreover, at current valuations, Home Depot could do a deal accretively using debt, but would require a substantially higher debt to cap ratio. Stock would be less accretive, but also less attractive to Home Depot due to flow back issues."
