Sainsbury’s has opened the door to a potential hostile bid for Argos-owner Home Retail after clarifying its position in the battle for the retailer.
The grocer had previously agreed terms on a cash plus shares offer for the group in February, before retail conglomerate Steinhoff swooped with an 11th hour all-cash bid worth £1.4bn.
“There can be no certainty that Sainsbury’s will proceed with an offer for Home Retail even if the pre-conditions are satisfied or waived”
Home Retail subsequently said it was reviewing its position, while it advised shareholders to take no action.
Sainsbury’s was handed an extension to its “put up or shut up” deadline to make a firm offer for Home Retail until March 18 – the same date as Steinhoff’s deadline.
But in a statement to the Stock Exchange, Sainsbury’s has clarified that it is able to ‘go hostile’ in its attempt to acquire Argos, should it wish to do so.
It confirmed, following a request from the Takeover Panel, that it could waive pre-conditions relating to due diligence and the recommendation of the Home Retail Group board.
However, sources close to the situation told Retail Week that a hostile bid was “unlikely to happen” because the Home Retail board had already recommended an offer from Sainsbury’s to its shareholders.
Last month, Sainsbury’s said that the announcement of any firm offer “would be subject to, amongst other things, satisfactory completion of due diligence and the recommendation of Home Retail Group’s board of directors.”
The supermarket giant has now made its position clear, adding: “Sainsbury’s wishes to clarify that these pre-conditions are waivable.
“There can be no certainty that Sainsbury’s will proceed with an offer for Home Retail Group even if the pre-conditions are satisfied or waived.”
Home Retail shake-up
Sainsbury’s boss Mike Coupe has previously stressed that the grocer would “not overpay” for the retailer, despite making clear his plans for Argos in a detailed 22-page presentation.
Steinhoff, backed by South African billionaire and New Look owner Christo Weise, has not revealed further details about how it would integrate Argos into its expansive furniture and general merchandise portfolio.
The latest twist in the battle for Home Retail Group comes after it completed the sale of its Homebase DIY chain to Wesfarmers at the weekend. The Australian group has revealed plans to rebrand the business under its Bunnings fascia within five years.
As revealed by Retail Week on Wednesday, Wesfarmers has culled the Homebase leadership team as it prepares to install a new executive board to spearhead its assault on the UK.
Separately, Steihoff crashed the party on another deal this week as its Conforama business tabled a rival bid for electricals retailer Darty for 125p per share. French retailer Fnac had made a formal bid for the business back in November.