Africans make last ditch bid for Argos

Sainsbury’s deal is hijacked as rival launches £1.4bn offer

A SOUTH African predator last night gatecrashed Sainsbury’s planned takeover of Argos.

Steinhoff, which owns Bensons For Beds and Harveys in the UK, launched a last-ditch £1.4bn cash offer for Home Retail Group.

The dramatic move, announced after the stock market closed last night, looks set to scupper Sainsbury’s £1.3bn plan to snap up the Argos chain.

The proposal from Steinhoff came ahead of Sainsbury’s ‘ put-up or shut-up’ deadline to make a formal offer on Tuesday at 5pm.

Earlier this month Sainsbury’s and Home Retail agreed a threeweek extension on the original takeover deadline in order to complete due diligence. Sainsbury’s has been stalking Argos for months as it looks to bring together two of the biggest names in British retail.

It first made an offer in November and subsequent offers were rejected until it increased its proposal to £1.3bn, which comprises a mix of cash and shares which at the time was equivalent to 161.3p a share. Since Sainsbury’s initial approach Home Retail has sold its Homebase chain for £340m to Australia’s Wesfarmers.

The Homebase sale is expected to complete by the end of March.

Steinhoff said it is ‘supportive of the ongoing disposal’ of Homebase.

Home Retail said in a statement: ‘The board is reviewing the Stein- hoff proposal with its advisers and will make a further announcement in due course.’

Steinhoff’s offer totals 175p a share and will be more attractive to shareholders as it is all in cash.

Sainsbury’s offer is a mixture of cash – at 55p a share – and shares which, if it went through, would see Home Retail shareholders own 12pc of Sainsbury’s.

Steinhoff operates in 20 countries across 24 brands including Conforama in France. It is listed on the Johannesburg stock market with a market value of £14bn but moved its primary listing to Frankfurt last year as part of its European focus.

It first invested in the UK in 2001 and later bought the owner of Benson For Beds and Harveys in 2005.

Benson has around 270 stores in the UK while Harveys has 150 or so.

The retail and manufacturing giant is thought to have met with Home Retail in the past year but the first approach about an offer came this week.

Argos runs around 800 shops and if Sainsbury’s were successful in its bid it planned to close up to 200.

Home Retail’s share price was less than 100p at the start of the year, before news of Sainsbury’s interest emerged. Its shares fell 1.6p to 153.6p yesterday and Sainsbury’s slipped 2p to 261.1p.

The last- ditch bid threatens Sainsbury’s plans to help it com- pete with online rivals such as US giant Amazon and help both businesses compete on the High Street in the internet age.

Sainsbury’s wanted to use Argos expertise in home delivery to bolster its own position in the grocery delivery market as well as improve its non- food sales. Argos has already been trialling outlets in Sainsbury’s supermarkets.

Sainsbury’s will now be locked in talks over the weekend to decide whether to increase its bid or ask for an extension from the Takeover Panel.

Sainsbury’s declined to comment on the South African bid.