DIYWEEK.net

Undeterred by its rejection at the end of last year, Sainsbury's is reportedly now poised to make a formal offer for Argos, Homebase and Habitat parent Home Retail Group (HRG).
It emerged last week that the supermarket chain approached HRG in November regarding a possible offer but was rebuffed. Now, there are reports that Sainsbury's is set to go back to the group and present a deal worth £1.2bn, although some believe £1.4bn would be more likely to succeed.

Sainsbury's, which is now talking to its shareholders, has to make its offer by February 2 but observers think it may come this week.

The appeal of HRG to Sainsbury's is Argos, with its multichannel capabilities, recent development of same-day deliveries and click-and-collect service. The grocer already has a number of Argos concessions in its supermarkets, and it is believed it would look to grow these significantly, thereby boosting footfall and overall sales within its stores.

As Argos leases expire over the next few years those stores would be closed - between 200 and 350 in total.

Meanwhile, Sainsbury's is not believed to be interested in retaining Homebase - which ironically was once a subsidiary of Sainsbury's - and it seems likely it would sell it off soon after any deal with HRG went through.