Home Depot is expected to get offers for contractor unit

Home Depot Inc., the world’s largest home improvement retailer, will receive separate offers of about $10 billion for its contractor-supplies unit from two private equity groups, people familiar with the negotiations said.

Bain Capital, Carlyle Group and Clayton Dubilier & Rice Inc. make up one group, and the other includes Thomas H. Lee Partners and CCMP Capital Advisors, said the people, who declined to be identified because an agreement hasn’t been reached. Final bids were due Friday, they said.

Chief Executive Frank Blake is reversing predecessor Robert Nardelli’s plans to expand the unit, which sells lumber and tools to contractors, to focus on retail stores.

“It’s a sign they see more opportunities in retail,” said Sarah Henry, a Berwyn, Pa.-based analyst with MFC Global Investment Management.

Selling the unit would show that Blake, who took over in January, “sees ways to invigorate that part of the business,” said Henry, who helps oversee $370 billion of assets, including Home Depot shares.

The company may reach an agreement as early as next week, the people said.

Shares of Home Depot rose 16 cents to $37.95.

Paula Drake, a spokeswoman for the Atlanta-based retailer, declined to comment. Representatives for Bain, Carlyle, Clayton Dubilier, Thomas H. Lee Partners and CCMP also declined to comment.

Home Depot told investors in February that it would consider shedding the unit. Nardelli wanted the division to generate 20% of Home Depot’s revenue, up from 13% now. The strategy was criticized by investors.