Sainsbury's readies £1.2bn bid for Home Retail Group - ToyNews

Sainsbury's readies £1.2bn bid for Home Retail Group

The sum will be the latest offer from the grocer, following the rejection of a former bid for the name behind Argos and Homebase in December last year.
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Supermarket giant Sainsbury’s is preparing a new £1.2bn bid for the Argos owner, Home Retail Group.

The sum will be the latest offer from the grocer, following the rejection of a former bid for the name behind Argos and Homebase in December last year.

Reports suggest that the offer could come as early as this week and may value the target at more than £1.2billion.

However, fund managers holding Home Retail shares believe that a convincing bid might have to be 180p a share, a value of £1.4 billion.

According to This is Money, Sainsbury’s chief executive Mike Coupe will lay out his strategic plan alongside the supermarket’s Christmas trading statement on Wednesday.

The belief is that Argos concessions will bring a different demographic into stores and that Coupe could benefit from the chain’s home delivery network.

An eventual deal could result in the closure of 25 per cent of Argos’ 850 shops as Sainsbury’s sets up Argos outlets inside its supermarkets.

One investment banking expert, said: ‘They have not yet answered the fundamental question about how they are going to get rid of [Argos’ sister chain] Homebase – which I think could be more difficult than they anticipate.

“Until they do that there is going to be a drag on this process.”

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