Milton Keynes-based company Home Retail Group have confirmed a second company has made a bid for the firm, which values the group at £1.4billion.
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BBC cited a spokesperson as saying: “Home Retail Group shareholders are advised to take no action at this time”.
Sainsbury’s pursuit of Home Retail received a setback last week after Steinhoff trumped its offer with a 1.4 billion-pound ($2 billion) bid.
Frankfurt-listed Steinhoff, which already has a retail presence in the United Kingdom through Bensons Beds and the Harvey’s furniture chain, on Friday proposed an all-cash offer of 175 pence for each Home Retail share.
Sainsbury Chief Executive Mike Coupe wants Argos to accelerate the supermarket’s growth strategy.
Sainsbury’s shares fell 2% on speculation that it may be forced to up the ante in the race to acquire the retailer.
However, the supermarket group has stressed that it will not overpay to secure a deal and analysts said that Steinhoff has significant financial muscle which could force Sainsbury’s to drop its plans if the two firms got into a bidding war.
Argos is a general retailer which built its business around a catalogue from which shoppers could choose goods in stores and has now one of the most advanced online sales and delivery networks in the country.
Patrick O’Brien, content director at analysts Verdict Retail, said he expected Sainsbury’s to ask for more time to consider another bid.
But he added: “We could clearly understand if Sainsbury’s decide to walk away at this juncture”.
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A statement from Home Retail said it was reviewing Steinhoff’s proposal and it would make a further announcement soon.
