Sainsbury's expected to ask for more time over Home Retail Group bid as Christo Wiese's Steinhoff International joins the party

Kasmira Jefford
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Sainsbury's first approached Argos-owner Home Retail in November (Source: Home Retail Group)

Sainsbury’s is expected to ask for an extension to tomorrow’s deadline for making a firm offer for Home Retail Group after a South African retail conglomerate waded in at the eleventh hour with a higher offer.

The supermarket chain revealed earlier this month that it had reached an agreement with Home Retail over a possible cash and shares offer of 161.3p-per-share, valuing the Argos owner at £1.3bn. Sainsbury’s has until tomorrow to firm up the offer.

However, on Friday Steinhoff International gatecrashed talks by making a higher cash offer of 175p-per-share - valuing Home Retail at £1.4bn.

Steinhoff owns Harveys and Bensons for Beds in the UK as well as France-based furniture chain Conforama. It is majority owned by Christo Wiese, the billionaire businessman who controls New Look and frozen food specialist Iceland.

The surprise bid gives Sainsbury’s little time to decide its next move. The retailer could therefore ask for tomorrow’s 5pm deadline to be pushed back, aligning it with Steinhoff’s 18 March deadline.

Sainsbury’s has made its case for a takeover of Argos, arguing that a combination of the two businesses would help accelerate its expansion into the rapidly growing world of online retail and allow it to take on the likes of Amazon and John Lewis.

It also justified its £1.3bn offer by arguing that putting more Argos concessions into its supermarkets would help address problems of excess space. However chief executive Mike Coupe has also pledged that it will not overpay for the company.

Neither offers from Steinhoff nor Sainsbury's mention Homebase, which Home Retail has already agreed to sell to Australia's Wesfarmers for £340m.

Sainsbury’s declined to comment.

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