JB-Hi-fi has today responded to speculation that it is considering an acquisition of The Good Guys.

The electronics retailer confirmed it is in preliminary discussions with The Good Guys in relation to a proposed sale.

In a company announcement, JB Hi-Fi asserted that at this stage, discussions between the two are ‘preliminary and exploratory in nature.’

“JB Hi-Fi has made no decision and nor has it entered into any agreement with respect to the acquisition of The Good Guys,” said Richard Murray, CEO.

“JB Hi-Fi understands that The Good Guys are looking at a range of options including an IPO on the ASX.”

Murray said that the retailer “evaluates all possible opportunities against a range of factors and would only pursue an acquisition if it made compelling financial sense for our shareholders.”

Update: Rivals react (19/5, 11:40AM, EAST)

Commenting on today’s speculation, John Winning, CEO of Winning Group and Founder of Appliances Online, thinks the potential takeover would complement JB’s offering, though he was cautious about the prospect of having 300 stores in the current retail climate.

“Both JB HiFi and The Good Guys are successful businesses within the discount space,” said Winning.

“Although there are some synergies between the two companies, their business models, branding and experience are quite different. The Good Guys are strong within major domestic appliances whereas JB HiFi is a leading player in AV and consumer electronics.

“Considering JB HiFi is in the early stages of expanding into the appliance market the prospect of a takeover isn’t completely unbelievable.

“The acquisition would compliment JB HiFi’s current offering and help it achieve its projected HOME store growth however I’m not sure how I would feel having more than 300 stores during a time where most retailers want to consolidate their physical footprint as the world adopts online as an alternative channel.”

Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.