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| Sainsbury's offers £1.3bn for Argos | Sainsbury's offers £1.3bn for Argos |
| (35 minutes later) | |
| Sainsbury's has offered £1.3bn to win control of Argos owner Home Retail Group. | Sainsbury's has offered £1.3bn to win control of Argos owner Home Retail Group. |
| After revealing earlier this month that an approach last year was rejected, the supermarket has offered the equivalent of 161.3p a share for the retailer. | After revealing earlier this month that an approach last year was rejected, the supermarket has offered the equivalent of 161.3p a share for the retailer. |
| The offer represents a 63% premium to Home Retail's share price on 4 January. | The offer represents a 63% premium to Home Retail's share price on 4 January. |
| A deal will depend on the sale of Homebase DIY chain that Australia's Wesfarmers has agreed to buy for £340m. | A deal will depend on the sale of Homebase DIY chain that Australia's Wesfarmers has agreed to buy for £340m. |
| Home Retail said that combining the two companies would create "a food and non-food retailer of choice for customers" and optimise use of their combined retail space. | |
| Sainsbury's expects to generate savings of £120m a year by 2019 by moving Argos stores into supermarkets as leases expire, as well as removing "duplication and overlap". | |
| However, costs of £140m would be incurred across the first three years. | |
| Sainsbury's had until 5pm Tuesday to make an offer for Home Retail. | Sainsbury's had until 5pm Tuesday to make an offer for Home Retail. |
| It agreed a three-week extension under takeover rules to carry out due diligence on the Argos owner and now has until 5pm on 23 February to make a firm bid. | |
| Under the cash-and-shares deal, Home Retail shareholders would receive 0.321 new Sainsbury's shares and 55 pence in cash for each share. | Under the cash-and-shares deal, Home Retail shareholders would receive 0.321 new Sainsbury's shares and 55 pence in cash for each share. |
| To reflect the proceeds of the Homebase sale, investors would also get about 25 pence per share and payment of 2.8 pence in lieu of a final dividend. | To reflect the proceeds of the Homebase sale, investors would also get about 25 pence per share and payment of 2.8 pence in lieu of a final dividend. |
| The chain's shareholders would own about 12% of the combined group if a deal progresses. | |
| Home Retail said it "believes in the prospects for the standalone company", but that the possible offer provides an "attractive opportunity" for shareholders. | |
| Home Retail shares, which closed at 152.9p on Monday, fell 3% to 148.2p in early trading on Tuesday. | |
| Sainsbury's shares were up 0.15% at 245.6p. |