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| Sainsbury's confirms £1.4bn Home Retail Group bid as Steinhoff pulls out | Sainsbury's confirms £1.4bn Home Retail Group bid as Steinhoff pulls out |
| (35 minutes later) | |
| Sainsbury’s has tabled a £1.4bn takeover of Home Retail Group after South African retail group Steinhoff ditched plans to make a rival bid for the Argos owner. | Sainsbury’s has tabled a £1.4bn takeover of Home Retail Group after South African retail group Steinhoff ditched plans to make a rival bid for the Argos owner. |
| Sainsbury’s confirmed its plans to bid with less than half an hour to go before its 5pm deadline on Friday set by the Takeover Panel. | Sainsbury’s confirmed its plans to bid with less than half an hour to go before its 5pm deadline on Friday set by the Takeover Panel. |
| The supermarket’s cash and shares bid marks no change from the deal agreed with Home Retail’s board last month. | The supermarket’s cash and shares bid marks no change from the deal agreed with Home Retail’s board last month. |
| At the time, Home Retail said it would be prepared to recommend an offer at that level to shareholders. But Sainsbury’s said on Friday that it had not been able to secure a recommendation from Home Retail’s board in time for the Takeover Panel’s deadline - which it attributed to the late withdrawal of Steinhoff’s offer. | At the time, Home Retail said it would be prepared to recommend an offer at that level to shareholders. But Sainsbury’s said on Friday that it had not been able to secure a recommendation from Home Retail’s board in time for the Takeover Panel’s deadline - which it attributed to the late withdrawal of Steinhoff’s offer. |
| Steinhoff, which owns furniture chains Bensons for Beds and Harveys in the UK, released a statement to the stock exchange in London confirming its withdrawal on Friday afternoon. | Steinhoff, which owns furniture chains Bensons for Beds and Harveys in the UK, released a statement to the stock exchange in London confirming its withdrawal on Friday afternoon. |
| Home Retail Group’s shares closed down nearly 10% at 163.2p and Sainsbury’s shares closed down nearly 3% at 273.2p after Steinhoff withdrew its offer. | |
| Markus Jooste, CEO of Steinhoff, said Home Retail was a “compelling business with unique attributes that remains attractive on many fronts” and expressed appreciation for the professional manner in which the company had handled the bid process. | Markus Jooste, CEO of Steinhoff, said Home Retail was a “compelling business with unique attributes that remains attractive on many fronts” and expressed appreciation for the professional manner in which the company had handled the bid process. |
| But he added: “Having concluded our due diligence review and ancillary discussions, we have evaluated our findings against our investment criteria and today come to a decision not to proceed with a firm intention announcement and offer.” | But he added: “Having concluded our due diligence review and ancillary discussions, we have evaluated our findings against our investment criteria and today come to a decision not to proceed with a firm intention announcement and offer.” |
| The logic behind Steinhoff’s withdrawal was clarified minutes later when the company, which also owns the Conforama electricals and furniture chain in France, issued another statement saying it had agreed a deal to buy French electronics retailer Darty for £673m. | The logic behind Steinhoff’s withdrawal was clarified minutes later when the company, which also owns the Conforama electricals and furniture chain in France, issued another statement saying it had agreed a deal to buy French electronics retailer Darty for £673m. |
| The withdrawal of Steinhoff’s potential £1.42bn offer cleared the way for Sainsbury’s to finalise its planned takeover of Home Retail which has been under discussion since last year. | The withdrawal of Steinhoff’s potential £1.42bn offer cleared the way for Sainsbury’s to finalise its planned takeover of Home Retail which has been under discussion since last year. |
| Sainsbury’s sees the acquisition of Argos as a way to accelerate its attempts to tap into the fast growing online market. | Sainsbury’s sees the acquisition of Argos as a way to accelerate its attempts to tap into the fast growing online market. |
| In a statement issued to the London stock exchange, Sainsbury’s said the merger would create “a leading food and non-food retailer of choice for customers, building on the strong heritage of both the Sainsbury’s and HRG businesses whose brands are renowned for trust, quality, value and customer service.” | In a statement issued to the London stock exchange, Sainsbury’s said the merger would create “a leading food and non-food retailer of choice for customers, building on the strong heritage of both the Sainsbury’s and HRG businesses whose brands are renowned for trust, quality, value and customer service.” |
| The company also said it had found £40m more financial benefits in merging its operations with Home Retail - taking the total to £160m - after looking through the Argos-owner’s books over the last few weeks. | The company also said it had found £40m more financial benefits in merging its operations with Home Retail - taking the total to £160m - after looking through the Argos-owner’s books over the last few weeks. |
| It made clear that it would not over pay for Argos, so shareholders will be watching closely to see if Sainsbury’s has been forced to up its offer in order to oust Steinhoff from the process. | |
| Steinhoff said it believed Conforama’s tie-up with Darty would create “a leading French household goods retailer, operating under well established and complementary retail brands.” | Steinhoff said it believed Conforama’s tie-up with Darty would create “a leading French household goods retailer, operating under well established and complementary retail brands.” |