Sainsbury’s is poised to ask for an extension to tomorrow’s cutoff to make a bid for Home Retail Group, following Steinhoff’s rival offer.

The grocer was given a put-up-or-shut-up deadline of 5pm on Tuesday to make a formal bid for the Argos owner, but will seek more time from the Takeover Panel.

Retail Week understands the supermarket giant’s senior management team, led by chief executive Mike Coupe and finance boss John Rogers, held talks over the weekend to discuss the next move.

Sainsbury’s could increase its offer for the group, walk away from a deal, or ask the panel for an extension.

Sainsbury’s strategy

It has previously stated that it would not overpay for Home Retail Group.

Coupe has said that the acquisition of Argos would “set Sainsbury’s up for the medium to long term” and allow it to “accelerate” its strategy, but he has also insisted the grocer would press on with its strategy if it failed to strike a deal.

However, sources close to the situation told Retail Week that Coupe and his senior team are not ready to throw in the towel and will seek more time to consider the options.

The latest development comes after Sainsbury’s agreed terms on a cash plus shares deal earlier this month, which valued Home Retail Group at £1.3bn.

The deal was worth 161.3p per share, comprising 55p cash per share along with 0.321 new Sainsbury’s shares.

Steinhoff offer

But Steinhoff, in which billionaire retail tycoon and New Look owner Christo Wiese is an investor, swooped in with a dramatic eleventh-hour bid on Friday, worth 175p per share. The all-cash offer trumps Sainsbury’s bid, valuing the business at £1.4bn.

Home Retail Group’s shares have surged 12% since the rival offer was tabled on Friday.