Home Retail Group is finalizing talks to sell its Homebase DIY and home decorations business to Australian conglomerate Wesfarmers for £340M. The deal, which could be finalized this week, would make room for Sainsbury’s to purchase Home Retail’s Argos chain. The supermarket chain made a £1bn offer for Home Retail in November, which was rejected, but has clarified that its interest lies exclusively in the Argos business.

Home Retail said it started talks with Wesfarmers, which possesses the Australian Coles market chain, in September. The UK organization included that there was no assurance an arrangement would be finished yet the two organizations were finalizing papers for the trade.

Home Retail said in an announcement to stock markets that the board trusts that a sale to Wesfarmers, substantial and strong group with an ambitious plan for the development of the business in the UK market, is the right step for all parties.

Wesfarmers, which has a market estimation of £21bn, claims Bunnings, a DIY chain with stores in Australia and New Zealand, and Homebase would check its first passage into the UK. The arrangement would exclude Home Retail’s product labels, which incorporate Habitat, Schreiber and Hygena, all of which are likewise sold in Argos. Then again, Homebase under new possession would have the capacity to keep offering the brands under license for a year.

John Walden, CEO of Home Retail, said that this arrangement would speak to great value for shareholders and expansion opportunity for the Homebase business and its associates. The deal would permit the group to concentrate on Argos and its change plan, with an enhanced balance sheet and financial position, which speaks to a greater prospect for building long haul shareholder value.

Shares in Home Retail climbed almost 5% to 148p on enhanced hopes in a Sainsbury’s arrangement while the general store’s shares slipped 1.4% to 248p as speculators stayed suspicious about the advantages of a merger.

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