5th Jan 2016 12:49
LONDON (Alliance News) - J Sainsbury PLC on Tuesday confirmed that it made an approach in November to buy Argos and Homebase owner Home Retail Group PLC in a cash and shares deal, though it said the approach was rebuffed and is was now considering its position.
The supermarket chain said the approach was rejected by Home Retail, but provide any details on the value of the bid. Sainsbury said it is now considering its position, although there can be no certainty that it will make a formal offer.
The two companies have been working together over the past year after Sainsbury's started trialling a number of Argos concessions in its stores. The grocer said it believes the combination of the two groups is an "attractive proposition" for both customers and shareholders of both companies.
Sainsbury's said a merger of the pair would create a "food and non-food retailer of choice for customers," adding it would boost the multi-channel sales capabilities of the businesses and would optimise the use of their respective retail space estates.
The supermarket added the deal would allow an expansion of its financial services proposition and deliver revenue synergies through cross-selling opportunities, including adding further Argos concessions in Sainsbury's stores and selling Sainsbury's products and services through the Argos network.
"The combination is an opportunity to bring together two of the UK's leading retail businesses, with complementary product offers, focused on delivering quality products and services at fair prices, through an integrated, multi-channel proposition," Sainsbury's said in a statement.
A further statement will be made as appropriate, Sainsbury's said. Home Retail has not yet published a response to the disclosure of the offer.
Shares in Sainsbury's were trading down 2.5% at 248.90 pence, while Home Retail shares were up 32% at 129.5889p on Tuesday afternoon, comfortably the best performer in the FTSE 250 and spiking following the announcement, having been trading higher throughout the morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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