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Retail

Sainsbury And Home Retail Said To Near Agreement On Price

J Sainsbury Plc and Home Retail Group Plc are nearing an agreement on the price Sainsbury will pay for the owner of Britain’s Argos chain and may seek an extension to hash out final details, according to four people familiar with the matter.

The retailers have narrowed their differences over the price as negotiations continue, said three of the people, who declined to be identified as the talks are private. They are discussing a deal in the range of 160 pence to 165 pence a share, according to one person.

Home Retail might ask the UK’s Takeover Panel to extend the deadline of 5 pm Tuesday that Sainsbury faces to either announce a firm intention to make an offer or walk away, the people said. No final decision has been made and the deal may still fall apart, the people said.

Representatives for both companies declined to comment.

Home Retail shares rose as much as 8.5 per cent to 148.3 pence in London, valuing the retailer at about £1.2 billion pounds ($1.7 billion). The company could be worth 159 pence a share in a bid scenario, according to the average estimate of 10 analysts surveyed by Bloomberg News.

Sainsbury made an initial approach in November that was rejected, and negotiations had stalled in late January over the price, four people familiar with the matter previously told Bloomberg News. Home Retail wanted at least 170 pence a share, and Sainsbury was unwilling to pay more than 150 pence, one of the people has said.

News by Bloomberg, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here.

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