2nd Feb 2016 07:28
LONDON (Alliance News) - J Sainsbury PLC and Home Retail Group PLC on Tuesday said they have reached an agreement on the terms of a possible offer for Home Retail, the Argos and Homebase owner, by the UK supermarket chain.
Under the terms of the possible offer, Home Retail shareholders will receive 0.321 of a new Sainsbury's share and 55 pence in cash for each Home Retail share.
In addition, Home Retail shareholders will receive approximately 25p per existing Home Retail share, plus 2.8p instead of a final dividend for the financial year ending February 27, reflecting a GBP200 million capital return in respect of the sale of Homebase, which Home Retail announced it is selling to Australian conglomerate Wesfarmers Ltd for GBP340.0 million earlier this month.
The possible offer by Sainsbury's implies a value of around GBP1.1 billion for Home Retail, based on the closing price of Sainsbury's shares on Monday of 242.55p. The possible offer and proposed capital returns together imply a value of around 161.3p per Home Retail share and a value of approximately GBP1.3 billion for Home Retail's share capital.
Home Retail's market capitalisation stands at GBP1.24 billion, and its shares closed Monday at 152.90p.
Under the terms of the offer, Home Retail shareholders will own approximately 12% of the combined group.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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