Home Retail Group’s shares have rocketed at their highest rate for more than two years following reports of a potential takeover bid.
Shares in the Argos and Homebase parent jumped 7.4% to 111p after suggestions that private equity companies are eyeing bids for the retailer.
Prior to today’s jump, the value of Home Retail’s shares had halved this year, valuing the business at £841m.
But according to The Sunday Times, several industry figures have been asked to advise on potential approaches for Home Retail. Any potential acquisition could be worth £1bn.
Interest has reportedly been sparked after Home Retail issued a shock profit warning last month, which it blamed on the unpredictable nature of Black Friday and Christmas trading and the increased investment in marketing its new same-day delivery service, Fast Track.
Shares sunk almost 18% following the warning, hitting their lowest level since chief executive John Walden took the reins in March 2014.
Independent retail analyst Nick Bubb said: “ahead of such a key trading period for Argos, including Black Friday and Christmas, and after its recent problems, nobody’s going to take too many chances with Home Retail and any bid approach will clearly not happen until after Christmas.
“However, the shares have been very weak and, given the strength of the balance sheet, it would be understandable if private equity funds are casting an eye over it.”
No comments yet