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| Argos owner Home Retail backs Sainsbury's takeover bid | Argos owner Home Retail backs Sainsbury's takeover bid |
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| Home Retail Group has backed Sainsbury’s £1.4bn takeover bid, ending four months of talks between the supermarket group and the owner of Argos to form a food and general merchandise retailer. | Home Retail Group has backed Sainsbury’s £1.4bn takeover bid, ending four months of talks between the supermarket group and the owner of Argos to form a food and general merchandise retailer. |
| The terms of the deal remain unchanged from the offer Sainsbury’s made two weeks ago after Steinhoff of South Africa pulled out of the running. At the time, Home Retail said it looked forward to recommending the offer to its shareholders. | The terms of the deal remain unchanged from the offer Sainsbury’s made two weeks ago after Steinhoff of South Africa pulled out of the running. At the time, Home Retail said it looked forward to recommending the offer to its shareholders. |
| Sainsbury’s will pay 55p in cash and 0.321 of its own shares for each Home Retail share, valuing Home Retail at £1.2bn, or 143.7p a share based on Sainsbury’s closing share price on Thursday. | Sainsbury’s will pay 55p in cash and 0.321 of its own shares for each Home Retail share, valuing Home Retail at £1.2bn, or 143.7p a share based on Sainsbury’s closing share price on Thursday. |
| Related: Argos patiently waits for its buyer to collect | Related: Argos patiently waits for its buyer to collect |
| Home Retail shareholders will also get 25p a share from the £200m sale of its Homebase chain and 2.8p a share in lieu of a final dividend for the financial year that ended last month. Those payments take the value of the deal to £1.4bn. | Home Retail shareholders will also get 25p a share from the £200m sale of its Homebase chain and 2.8p a share in lieu of a final dividend for the financial year that ended last month. Those payments take the value of the deal to £1.4bn. |
| Some analysts had thought Home Retail might seek to extract a higher price from Sainsbury’s before recommending the offer to shareholders. But with no other bidder in sight, the offer remained unchanged. | Some analysts had thought Home Retail might seek to extract a higher price from Sainsbury’s before recommending the offer to shareholders. But with no other bidder in sight, the offer remained unchanged. |
| The deal ends almost five months of talks between the retailers since Sainsbury’s revealed in January it had expressed an interest in Home Retail in November. Sainsbury’s has secured a deal it said will help it take on Amazon and diversify away from the ultra-competitive food retail market. | The deal ends almost five months of talks between the retailers since Sainsbury’s revealed in January it had expressed an interest in Home Retail in November. Sainsbury’s has secured a deal it said will help it take on Amazon and diversify away from the ultra-competitive food retail market. |
| David Tyler, Sainsbury’s chairman, said: “We are very pleased the board of Home Retail has recommended our offer for the acquisition of its business to its shareholders. The combined business will offer a multi-product, multichannel proposition, with fast delivery networks, which we believe will be very attractive to customers and which will create value to both sets of shareholders.” |