skip to main content
Find Insight DIY on
* * *

UK DIY News

Sainsbury's expected to increase bid to 1.2bn

Homebase image

It is anticipated that later this week, Sainsbury's will increase its bid for Home Retail Group to around £1.2bn. Under City rules, they have until 2nd February to table a formal offer and their move this week is expected to raise the stakes with the other companies already circling HRG.

On Wednesday, Mike Coupe, Sainsbury's CEO as well as updating the city on their Christmas trading statement is expected to present his strategic plan. With regard to Argos, he believes that extending the current in-store trials will bring a different demographic of consumer into Sainsbury's stores as well as being able to gain from the chain's extensive home delivery network.

Any deal is now certain to result in the disposal of Homebase to a venture capitalist, as well as the closure of up to 200 Argos high street stores. A banking source commented last week: ‘They have not yet answered the fundamental question about how they are going to get rid of Homebase – which I think could be more difficult than they anticipate. Until they do that there is going to be a drag on this process.’

Sources have indicated that Sainsbury’s has already identified a possible buyer for Homebase, but the price will ultimately depend upon what it has to pay to acquire HRG.

Although Home Retail has been struggling, it may also be attractive to private equity bidders as it is cash generative and debt free. However, at this point, Sainsbury’s seems confident it has the momentum to secure the deal.

Source: Insight Retail Team

10 January 2016

Related News

view more UK DIY News
*

I find the news and articles they publish really useful and enjoy reading their views and commentary on the industry. It's the only source of quality, reliable information on our major customers and it's used regularly by myself and my team.

*
Simon Fleet - Sales & Marketing Director, Thomas Dudley Ltd
Newsletters

Don't miss out on all the latest, breaking news from the DIY industry