HRG shares soar as Steinhoff beats Sainsbury’s offer


The shares in Argos owner Home Retail group escalated 12 percent after the South African retail group, Steinhoff proposed a £1.4bn take over bid. The English supermarket giant Sainsbury has made an offer of 167p a share which values Home Retail at £1.35bn. But in the current scheme of things, Sainsburys would be forced to either raise the current £1.3bn cash and shares offer or walk away from the deal.

Under the light of the new offer from Steinhoff, industry experts expects Sainsbury to ask for an extension of deadline to finalise the deal. The deadline for a firm bid for Argos ends tomorrow. The increase of the shares after the new offer was made took it to 172p, just below the 175p terms proposed by Steinhoff. The request for more time from the Takeover Panel would come from Sainsbury’s with the agreement of Argos’s parent, Home Retail Group (HRG), and would likely propose 18 March, the same date for Steinhoff to make a firm bid.

If the takeover panel refuses to extend the deadline then, Mike Coupe, chief executive of Sainsbury’s would have to raise his bid or leave the deal. Steinhoff is keen to bag the deal as it owns Bensons for Beds and Harveys in the UK and Conforama in France, which are rivals for Home Retail Group. The chain also runs discounter stores in Africa and Australasia. Sainsbury’s is hemmed in by promises not to overpay for the owner of Argos but also because Coupe does not want to see a deal, which would bring together both of their small electrical businesses, slip through his hands.