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Argos owner receives takeover bid from South African firm

Argos are currently owned by the Home Retail Group. Credit: PA

Sainsbury's could be drawn into a bidding war for Home Retail Group after it was announced the Argos owner is considering a rival offer from a South African-based retailer.

Steinhoff, which makes furniture, made the approach to the Home Retail board earlier today.

They are now reviewing the proposal and have asked shareholders to take no further action.

The news comes after Home Retail had previously said it was willing to recommend the Sainsbury's bid which valued the company at £1.3 billion.

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Sainsbury's tables £1.3bn bid for Home Retail Group

Sainsbury's is close to taking over Home Retail Group. Credit: PA

Supermarket giant Sainsbury's has tabled a proposed bid to take over Home Retail Group - the owners pf Argos and DIY chain Homebase - in a deal worth up to £1.3 billion, the retailer said.

Sainsbury's had an initial approach for Home Retail Group rejected in November, but the two sides were locked in negotiations over the weekend.

Sainsbury's boss Mike Coupe said a potential tie-up would create the UK's largest non-food store, a £6 billion giant.

But analysts question whether Sainsbury's might be biting off more than it can chew by taking on Argos.

ITV News Business Editor Joel Hills reported that shareholders in Home Retail Group would receive a 12% stake in the new business once a deal is finalised.

Chief among Mr Coupe's plans will be to leverage the power of Argos's online business and strong customer appetite for its click & collect service.

He also hoped to launch a raft of Argos concessions in Sainsbury's supermarkets in an effort to boost footfall.

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Sainsbury's rebuffed in bid for £1bn-valued Argos owner

Sainsbury's has had an undisclosed approach for the £1 billion-valued group that owns Argos and DIY chain Homebase rejected.

The supermarket said it made an initial approach for Home Retail Group in November and is still deciding whether to table a former offer.

Sainsbury's has worked closely with Home Retail with Argos concessions trialled in the supermarket's stores last year. Credit: PA Wire

The supermarket, which made the approach amid an industry price war, said a combination of the two stores would create a strong food and non-food retailer with strong heritages.

Shares in Home Retail jumped 34% after details of the November approach emerged, while Sainsbury's stock slipped more than 3%.

Sainsbury's pre-tax profit down 17.9% to £308 million

Sainsbury's underlying group sales were down 2% to £13.6 million. Credit: PA

Sainsbury's underlying pre-tax profit was down 17.9% to £308 million, results from the supermarket revealed on Wednesday.

Like-for-like sales were down 1.6% in the 28 weeks to September 26, while underlying group sales were down 2% to £13.6 million, compared to £13.9m in the same period last year.

Sainsbury's chief executive Mike Coupe said: “The grocery retail marketplace remains challenging but Sainsbury’s is a great business, run by an experienced management team, supported by talented colleagues and strong values.

"I am confident we are making progress and we are looking forward to a successful Christmas, offering our customers fantastic products and great value."

Sainsbury's announces first annual profits fall in a decade

Sainsbury's announces first annual profits fall in a decade Credit: Press Association

Sainsbury's has announced its first drop in profits in a decade as it counts the cost of "unprecedented" change in the supermarket industry.

The UK's third biggest grocer racked up a profit of #681 million for the year to March 14 - a 14.7% decline on a year earlier after a period in which like-for-like sales dropped 1.9%.

Chief executive Mike Coupe said: "The UK marketplace is changing faster than at any time in the past 30 years which has impacted our profits, like-for-like sales and market share."

The company also cut its full-year dividend for shareholders by 23.7%.

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