By Staff writer
Positive news will help rejuvenate its takeover bid for Argos owner Home Retail
Sainsbury's, the British supermarket chain in which Qatar owns a 25.9 percent stake, reported a better-than-expected performance in its Christmas quarter and upgraded its sales forecast for the second half.
Britain's second-biggest supermarket, Sainsbury's said it now expects its like-for-like sales in the second half of the year to be better than the first.
The positive news comes as it was revealed earlier this month the firm’s takeover bid for Argos' parent company Home Retail was rejected in November.
The approach is a bold gambit by Sainsbury's boss Mike Coupe to reduce its reliance on food sales when the wider British supermarket industry is being hammered by the growth of German discounters Aldi and Lidl in a brutal price war.
It did not disclose the value of its proposal but said that it had approached Home Retail's board about a possible cash and shares offer for the group, which had a market capitalisation of 804 million pounds ($1.18 billion) before news of the spurned proposal emerged.
Home Retail said the approach undervalued the group and its prospects, advising investors to take no action.
At the weekend, the Daily Mail reported Lord Sainsbury, a former chairman of the chain and the great-grandson of the company’s founder, has backed a new bid for Home Retail.
The report added any new takeover bid would need the support of the Qatar Investment Authority, which is Sainsbury’s largest shareholder.