Sainsbury’s has confirmed a bid of £1.4 billion for Argos owner Home Retail Group (HRG).
The offer came after its competitor, South African retailer Steinhoff, pulled out of the takeover battle on Friday.
Both retailers had until 5pm on Friday, March 18, to make a firm offer or walk away.
The HRG board said it had noted the offer by Sainsbury’s and that it was looking forward to working with the company towards a recommendation of the offer.
In a statement, Sainsbury’s chairman David Tyler said: “The UK grocery retail industry is undergoing a period of intense change in customer shopping behaviour and in the competitive environment. Against this backdrop, Sainsbury’s has performed resiliently by offering great quality products at fair prices, by providing a differentiated service, and by developing strong multichannel capabilities. All of this continues to be underpinned by our core values.
“This combination with HRG presents an opportunity to accelerate our strategy, delivering compelling revenue and cost synergies. We will create a multi-product, multichannel proposition with fast delivery networks that we believe will be very attractive to the customers of both businesses.”
As well as the announcement that it was walking away from the takeover battle, Steinhoff also said it had offered £673 million for Darty, Europe’s third largest electrical retailer.
Darty is currently owned by UK-based Darty plc, formerly Kesa Electricals, which demerged from Kingfisher Group in July 2007.