Supermarket Sainsbury’s says it tried to buy Home Retail Group, the owner of Argos and Homebase, but was rejected.
The supermarket put out a statement on Tuesday saying it “made an approach” about “a possible offer for Home Retail Group, in the form of Sainsbury’s shares and cash.” The value of the deal is not given but the Guardian reports that it was somewhere around £1 billion.
Sainsbury’s has been trialing mini-Argos concessions within its stores over the last year and says it thinks a merger would be “an attractive proposition for the customers and shareholders of both companies, establishing a platform for long-term value creation.”
A deal would “bring together two of the UK’s leading retail businesses, with complementary product offers, focused on delivering quality products and services at fair prices, through an integrated, multi-channel proposition,” according to Sainsbury’s.
Catalogue retailer Argos sells everything from jewellery and toys to home appliances, while Homebase specialises in DIY and gardening supplies.
The crux of Sainsbury’s argument is that combining the two companies would create a business that could sell customers everything from food and clothing to hardware and electricals, using the strong retail footprint and online presence of both businesses.
Home Retail Group, which rejected the offer, has yet to put out a statement. Shares in the company, which were bombed out after a profit warning in October last year, have jumped almost 30% on news of the takeover offer.
Sainsbury’s shares, meanwhile, are down around 4%.
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