Steinhoff said it was supportive of Home Retail’s decision to sell its Homebase chain to Wesfarmers Ltd, a move that would return 200 million pounds ($287 million) to Home Retail shareholders.
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South African-based furniture retailer Steinhoff International has reportedly made a bid to acquire UK-based Home Retail Group (HRG) for £1.4bn ($2bn). If an extension is not granted, Sainsbury’s would be forced to either raise his £1.3 billion cash and shares offer or walk away.
That was 8.5 percent higher than Sainsbury’s cash and shares proposal worth 161.3 pence, or a total of 1.3 billion pounds ($1.84 billion), when it was made on February 2 that Home Retail had said it was willing to recommend.
Home Retail’s shares increased to 173p, close to the 175p-per-share offer that South African retailer Steinhoff lodged late on Friday.
Sainsbury’s boss Mike Coupe spent the weekend at home in York but held a conference call with other executives including finance director John Rogers, who was in Surrey.
The Guardian reported that Sainsbury’s would probably propose 18 March – which is date by which new entrant Steinhoff must submit its firm bid.
Sainsbury’s share price fell at the opening bell this morning.
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Monteyne expects Sainsbury to match Steinhoff’s proposal but noted any bid above 186p would likely require shareholder approval, adding further complexity. By creating Britain’s largest general merchandise business it would be less reliant on a food market showing little growth. It has said that the merger would bring savings in the region of £120m, much of which would come from putting Argos stores into Sainsbury’s outlets.
