Tue, 02 Feb 2016 | BUSINESS SALE
Sainsbury's has been circling the Home Retail Group, owner of Argos and Homebase, for some months now, but this week the company has put forward a fresh offer of £1.3 billion.
The firm's approach last year was rejected but undeterred, Sainsbury's put forward the £1.3 billion offer in a bid to gain control of the group once again. It looks as if the bid has now been successful with an initial agreement reached between the two companies.
Sainsbury's interest is being driven by expected savings by amalgamating Argos stores and supermarket sites. It is also anticipating some efficiencies to be made through selling its own clothing and homeware ranges through Argos.
Steve Clayton, head of equities research with Hargreaves Landsdown, commented on the bid, stating that it was indicative of “bold play” on the part of Sainsbury's.
He added: "It is looking to buy a struggling business when the supermarket itself is fighting strong headwinds.
"The takeover will be a considerable strain on management time when they already have quite a lot on their plate."
The £1.3 billion valuation figure is derived from the £1.2 billion which Sainsbury's would pay for equity in the company as well as a £200 million cost incurred for honouring an existing Home Retail agreement to return this money to shareholders after the sale of Homebase to Wesfarmers, an Australian firm, for £340 million.
View more businesses for sale.
This leading recruitment agency boasts over 30 years of expertise in mechanical and electrical engineering, offering a robust infrastructure and an extensive candidates' database.
Explore a dynamic business opportunity with a relocatable, eco-friendly contract packing and reworking specialist located in Norfolk.
A highly respected family business specialising in waste recycling is now available in West Yorkshire, offering a unique opportunity in a thriving industry.
Please choose your settings for this site below. For more information please read our Cookie Policy
These cookies are necessary for our website to function properly and provide you with access to all features.
These are analytics cookies that help us to improve the way our website works.
These are used to improve the functional performance of the website and make it easier for you to use.