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| Sainsbury's wins battle to buy Argos | Sainsbury's wins battle to buy Argos |
| (35 minutes later) | |
| Sainsbury's has won its four-month battle to buy Argos after its owner after agreed to a £1.4bn takeover. | Sainsbury's has won its four-month battle to buy Argos after its owner after agreed to a £1.4bn takeover. |
| The supermarket said the deal to buy Home Retail Group would create a "multi-product, multi-channel" retailer with about 200 stores. | The supermarket said the deal to buy Home Retail Group would create a "multi-product, multi-channel" retailer with about 200 stores. |
| Sainsbury's will pay a combination of shares and cash, with Home Retail shareholders holding 12% of the combined business. | Sainsbury's will pay a combination of shares and cash, with Home Retail shareholders holding 12% of the combined business. |
| The deal should be completed in the third quarter of this year. | The deal should be completed in the third quarter of this year. |
| Chairman David Tyler said he believed the combined business would be "very attractive to customers" and create value for shareholders of both companies. | Chairman David Tyler said he believed the combined business would be "very attractive to customers" and create value for shareholders of both companies. |
| What does Sainsbury's want Argos? | What does Sainsbury's want Argos? |
| The supermarket had faced a rival bid for Home Retail from South Africa's Steinhoff, although a formal offer never materialised. | The supermarket had faced a rival bid for Home Retail from South Africa's Steinhoff, although a formal offer never materialised. |
| As many as 200 Argos stores are expected to close over the coming years as leases expire, with some relocated in Sainsbury's supermarkets. | |
| Shares in Home Retail Group fell 1.1% to 164p in early trading, while Sainsbury's fell 1.3% to 272.7p. | Shares in Home Retail Group fell 1.1% to 164p in early trading, while Sainsbury's fell 1.3% to 272.7p. |
| Steve Clayton, head of equity research at Hargreaves Lansdown, said: "This deal catapults Sainsbury's exposure to non-food items forward by around £4bn a year, and offers tantalising synergies from integrating the Argos estate and delivery capabilities with Sainsbury's own. | |
| "For Home Retail investors, the deal offers a welcome recovery in the value of their investment, following many years of difficult trading." | |
| Clive Black, an analyst at Shore Capital, said Sainsbury's had not overpaid for the Argos owner, adding: "We see the HRG board recommendation as good news for Sainsbury's management and we remain neutral on Sainsbury's stock." | |
| The deal spells the end for Home Retail Group as a listed company. In January, it sold the DIY chain Homebase to Australia's Wesfarmers for £340m. |