New bidder gatecrashes Qatar-backed Sainsbury’s $1.9bn takeover of Argos owner

Steinhoff International makes improved bid, just days before a deadline to conclude deal expires

British supermarket giant J Sainsbury’s pursuit of Home Retail Group, the owner of Argos and Homebase, is in jeopardy following a last-minute offer from a rival.

Steinhoff International, the owner of Harveys and Bensons for Beds, has made an offer worth 175p per share for Home Retail Group, the Times reported. 

The news is a blow for Sainsbury’s, in which the Qatar Investment Authority (QIA) has a 25.1 percent stake. The retailer has been seeking to acquire Home Retail Group for three months, and had lodged a cash-and-shares offer for the firm valued at about 161p per share.

Sainsbury’s sees the acquisition as an opportunity to boost its online business and expand sales of items such as electrical goods.

The acquisition is a response to intense competition between British supermarket groups and will make Sainsbury's less reliant on food sales.

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.

Britain's retail sector has been hammered in recent years by the growth of discount groups including Germany's Aldi and Lidl and online competition.
While Sainsbury's has fared better than most, it believes it needs to improve its online sales and enhance its delivery capabilities in order to grow.

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

NOTE: Comments posted on arabianbusiness.com may be printed in the magazine Arabian Business

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

All comments are subject to approval before appearing

Further reading

Features & Analysis
First bank merger in 20 years sets Saudi Arabia up for more deals

First bank merger in 20 years sets Saudi Arabia up for more deals

Q&A look at what the planned merger of HSBC and RBS’s Saudi ventures...

A natural move: How Dubai Chamber is strengthening its ties in Latin America

A natural move: How Dubai Chamber is strengthening its ties in Latin America

With vast resources and more than half-a-billion people, the...

If Saudi future's so bright, why can't these banks find buyers?

If Saudi future's so bright, why can't these banks find buyers?

No big-name global banks eager to buy stakes in Saudi banks,...

Most Discussed
sponsoredTracking