UK supermarket Sainsbury’s offers £1.4 bn for catalogue chain

Bloomberg

British supermarket group Sainsbury’s said it had made a formal offer worth £1.4 billion for Home Retail Group, owner of catalogue chain Argos.
The cash-and-stock takeover is worth the equivalent of $2.0 billion or 1.8 billion euros. Argos sells household items, including televisions, furniture and gardening tools.
With South African household goods group Steinhoff having walked away from the bidding process, it appeared likely that Sainsbury’s will see its offer accepted according to analysts.
The sale of HRG’s home improvements and gardening chain Homebase to Australian business Wesfarmers is meanwhile a condition of the deal going through.
“The UK grocery retail industry is undergoing a period of intense change in customer shopping behaviour,” Sainsbury’s chairman David Tyler said Friday in a statement detailing the offer.
Sainsbury’s is already working with HRG to test a number of Argos concessions in its supermarkets.
Sainsbury’s is the second largest chain of supermarkets in the UK with a share of the UK supermarket sector of 16.9 percent. Founded in 1869 by John James Sainsbury with a shop in Drury Lane, London, the company became the largest grocery retailer in 1922, was an early adopter of self-service retailing in the UK, and had its heyday during the 1980s.
In 1995, Tesco overtook Sainsbury’s to become the market leader, and Asda became the second largest in 2003, demoting Sainsbury’s to third place for most of the subsequent period until 2014, when Sainsbury’s regained 2nd place. The holding company, J Sainsbury plc, is split into three divisions, Sainsbury’s Supermarkets Ltd, Sainsbury’s Convenience Stores Ltd (Sainsbury’s Local), andSainsbury’s Bank. The group’s head office is in the Sainsbury’s Store Support Centre in Holborn Circus, City of London. The group also has interests in property.
As of May 2011, the largest Sainsbury family shareholders are Lord Sainsbury of Turville with 4.99 percent, with Judith Portrait the trustee of various Sainsbury settlements and charitable trusts holding 3.92 percent.
The largest overall shareholder is the sovereign wealth fund of Qatar, the Qatar Investment Authority, who hold 25.999 percent of the company. It is listed on the London Stock Exchange and is also a constituent of the FTSE 100 Index.