This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.bbc.co.uk/news/business-35469616

The article has changed 11 times. There is an RSS feed of changes available.

Version 7 Version 8
Sainsbury's offers £1.3bn for Argos Sainsbury's to 'future-proof' with £1.3bn Argos deal
(about 1 hour later)
Sainsbury's has offered £1.3bn to win control of Argos owner Home Retail Group. Sainsbury's aims to "future-proof" its business with the £1.3bn offer to buy Argos owner Home Retail Group.
After revealing earlier this month that an approach last year was rejected, the supermarket giant has offered the equivalent of 161.3p a share for the retailer. Chief executive Mike Coupe said the deal would allow consumers to shop "whenever and wherever" they wanted.
The offer represents a 63% premium to Home Retail's share price on 4 January. "We can bake a bigger cake and do a better job for our customers than we can do as separate businesses," he told the BBC.
A deal will depend on the sale of the Homebase DIY chain that Australia's Wesfarmers has agreed to buy for £340m. Sainsbury's made an offer worth 161.3p a share for Home Retail on Tuesday.
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. The offer represents a 63% premium to Home Retail's closing share price on 4 January when the supermarket's interest was revealed.
John Rogers, Sainsbury's chief financial offer, said he was confident that shareholders in both Sainsbury's and Home Retail would back the deal.
The £120m of annual savings expected by 2019 was also a "conservative" figure, he added.
Why does Sainsbury want to buy Argos?Why does Sainsbury want to buy Argos?
Sainsbury's expects to make savings by moving Argos stores into supermarkets as leases expire, as well as removing "duplication and overlap" and selling its own clothing and homeware ranges through Argos. Sainsbury's approached the owner of Argos and the Homebase DIY chain in November, but was rebuffed by Home Retail's board.
However, it said making these changes would cost it £140m in the first three years. The deal will depend on the sale of Homebase that Australia's Wesfarmers has agreed to buy for £340m.
Steve Clayton, head of equities research at Hargreaves Lansdown, described the offer as a "bold play" by Sainsbury's.Steve Clayton, head of equities research at Hargreaves Lansdown, described the offer as a "bold play" by Sainsbury's.
"It is looking to buy a struggling business when the supermarket itself is fighting strong headwinds," he said."It is looking to buy a struggling business when the supermarket itself is fighting strong headwinds," he said.
"The takeover will be a considerable strain on management time when they already have quite a lot on their plate.""The takeover will be a considerable strain on management time when they already have quite a lot on their plate."
Like-for-like sales at Argos fell 2.2% in the 18 weeks to 2 January. Like-for-like sales at Argos fell 2.2% in the 18 weeks to 2 January amid intense competition in the retail sector.
Home Retail shares, which had traded at about 100p before the approach by Sainsbury's, were flat at 152.9p on Tuesday, while Sainsbury's rose 1.8% to 249p. Home Retail shares, which had traded at about 100p before the approach by Sainsbury's, fell 0.1% to 152.7p on Tuesday, while Sainsbury's rose 1.8% to 249.1p.
John Rogers, Sainsbury's chief financial offer, said he was confident that shareholders in both Sainsbury's and Home Retail would back the deal.
The £120m of annual savings expected by 2019 was also a "conservative" figure, he added.
Sainsbury's expects to make savings by moving some Argos stores into supermarkets as leases expire, as well as removing "duplication and overlap" and selling its own clothing and homeware ranges through Argos.
However, it said making these changes would cost it £140m in the first three years.
Deadline extensionDeadline extension
Sainsbury's had until 17:00 on Tuesday to make an offer for Home Retail.Sainsbury's had until 17:00 on Tuesday to make an offer for Home Retail.
It now has three weeks under takeover rules to carry out due diligence on the Argos owner, meaning it must make a firm offer by 17:00 on 23 February or walk away.It now has three weeks under takeover rules to carry out due diligence on the Argos owner, meaning it must make a firm offer by 17:00 on 23 February or walk away.
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.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 said it "believes in the prospects for the standalone company", but that the possible offer provides an "attractive opportunity" for shareholders.