HOME Retail Group confirmed the sale of its Homebase chain to Wesfarmers, and said it would return £200m of the proceeds to shareholders.
The company, which retains its larger Argos business, said last week it was in advanced talks to sell the chain to the Australian company for £340m.
Wesfarmers said on Monday it would spend another £242m refurbishing the 265 stores.
Home Retail rejected a separate approach from Sainsbury’s for the whole group in November.
The supermarket chain, which was mainly interested in Argos, has until February 2 to make a formal bid.