It looks like Sainsbury's has finally won the battle to buy the owner of Argos and Homebase
In a regulatory filing released on Friday afternoon, Sainsbury said that it is offering to buy Home Retail Group for a combined value of £1.454 (£2.11) per share, which includes cash and Sainsbury's shares. The deal values Home Retail at around £1.2 billion (£1.74 billion).Crucially, Sainsbury's says that Home Retail is likely to recommend to shareholders that they should approve the deal.
Sainsbury's initially approached HRG in early January about a possible takeover, before making another offer at the start of February. Both were turned down, but the new offer means that a deal looks likely to go ahead.Speaking about the offer, Sainsbury's chairman, David Tyler said:
"This combination with Home Retail Group presents an opportunity to accelerate our strategy, delivering compelling revenue and cost synergies. We will create a multi-product, multi-channel proposition with fast delivery networks that we believe will be very attractive to the customers of both businesses."The statement released by the supermarket says that it expects to make business synergies of as much £160 million (£231.8 million) in the third year after the deal is completed, up from £120 million (£174 million) in earlier estimates.The move comes on the same day that South African group Steinhoff International, who had been fighting Sainsbury's to buy HRG, confirmed that it is no longer interested in buying the retailer. "Steinhoff now confirms that it does not intend to make an offer for Home Retail," Steinhoff said in a statement.
Sainsbury's announcement was made one minute after Britain's financial markets closed for the day, so investors will not get a chance to react to the news until Monday when markets re-open.
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