Essential reading for retailers and suppliers in the home improvement market

UPDATE: Sainsbury's makes £1.4bn offer for Home Retail

Published: 18 March 2016
Sainsbury's has confirmed it has made a £1.4bn offer to take over the ownership of Argos following Steinhoff's dramatic exit just hours ago.
UPDATE: Sainsbury's makes £1.4bn offer for Home Retail
Sainsbury's announced its intentions at the eleventh hour before the Takeover Panel's 5pm decision deadline. It said its offer hoped to "create a leading food and non-food retailer of choice for customers, building on the strong heritage of both the Sainsbury's and HRG businesses whose brands are renowned for trust, quality, value and customer service."

It also said it would optimise the use of both Sainbury's and HRG's existing combined retail space, adding: "The combined group will have attractively located stores across the UK and Ireland, with an enhanced supply and delivery network."

Sainsbury's said Home Retail Group shareholders will be entitled to 0.321 Sainsbury's shares and 55.0 pence in cash. In addition, Home Retail Group shareholders will each receive a special dividend of 27.8 pence per share, it said.
Importantly, that special dividend will only be paid if Home Retail Group pays it before the Sainsbury's offer becomes unconditional.

That special dividend is comprised of 25.0 pence per share for the sale of Home Retail's Homebase chain to Wesfarmers, and a 2.8 pence dividend in lieu of a final dividend for Home Retail's financial year ended February 27, 2016.

Excluding the special dividend, the offer made by Sainsbury's represents and indicative value of 145.4 pence per Home Retail Group share, valuing the chain at £1.20 billion.

Including the special dividend, if paid, the offer represents and indicative value of 173.2 pence per share, valuing Home Retail Group at £1.40 billion.
Home Retail Group shareholders would own around 12% of the enlarged issued share capital of the new business.

Sainsbury's said Home Retail Group has not yet recommended its offer, but said it will continue to discuss the merits of the deal.

Sainsbury's said, following its due diligence on the offer, it believes it can achieve a higher level of earnings before interest, tax, depreciation and amortisation synergies in the third full year after the deal is completed, of "no less than" £160.0 million, compared to the previous estimate of only £120.0 million.

It comes following the dramatic exit from main rival Steinhoff International earlier this afternoon, when it was revealed the South African company was pulling out of the race in favour of bidding for electrical firm Darty instead.


(Your email address will not be published)
Already Registered?
Sign In
Not Yet Registered?
Printable View E-mail Bookmark

What do you think?

What would help you maximise sales of hardware lines?

Latest reader comments

re: Tommy Walsh: 'I'm really proud of my £1 tools'

Danny Ocean
When are the general public going to realise, that every so called brand or celebrity named product is all to often, a low cost Chinese ...

re: Tommy Walsh: 'I'm really proud of my £1 tools'

Chris Elliot
Professional trades man with a full range of tools from Poundland. My favourite is my spirit level never lets me down. I like going on a ...

re: Homebase appoints Ian Topping as chairman

Homebase is a lost and needs to close all its stores and do what a pc has to do when it gets a virus...a complete factory reset.Start again ...

re: Graham Bell to head up B&Q as part of Kingfisher reshuffle

B&Q alice
Disgraceful share price plummet seemed to accelerate with buyback scheme. No leadership from VL to help stem this plummet leaving investors ...

re: Homebase appoints Ian Topping as chairman

HMV & Steinhoff hardly success stories by any stretch of the imaginiation!Homebase needs someone with relevant sector background....

Most read stories