• South African retailer Steinhoff offers £1.4bn for Argos
  • All-cash offer is higher than that made by Sainsbury’s
  • Argos-owner Home Retail is reviewing Steinhoff’s proposal

South African retailer Steinhoff has thrown its hat into the ring for control of Argos after making a higher offer for the business than is on the table from rival suitor Sainsbury’s.

Steinhoff, in which billionaire retail tycoon and New Look-owner Christo Wiese is an investor, has offered 175p per share for Argos-owner Home Retail Group.

The all cash offer values Home Retail at £1.4bn, versus £1.3bn from Sainsbury’s whose offer involves shares as well as cash.

Sainsbury’s revealed its interest in Home Retail in January and was working towards a deadline of next Tuesday to proceed.

Home Retail said: ”The board is reviewing the Steinhoff proposal with its advisers and will make a further announcement in due course. Home Retail Group shareholders are advised to take no action at this time.”

Sainsbury’s boss Mike Coupe believes the  grocer can compete with businesses such as John Lewis, Amazon and Marks & Spencer if it completes a takeover of Argos.

He said earlier this month that a tie-up would “accelerate” Sainsbury’s multichannel strategy and “set Sainsbury’s up for the medium to long term”.

Coupe said the combined Sainsbury’s and Argos business would boast 2,000 stores, 100,000 non-food products and a “world-leading” distribution network, which would allow it to go toe-to-toe with the biggest players in the market.

That ambition may now be threatened by the interention of Steinhoff, which operates in the UK - where it owns the Harveys furniture chain -  Europe, Africa and Australasia.

It describes its retail operations as ”positioned towards price conscious consumer segments, providing them with affordable products through a vertically integrated supply chain”.

The retailer has a main listing on on the Frankfurt Stock Exchange and a secondary one on the Johannesburg exchnage and is capitalised at €18 billion.

Home Retail’s sale of its DIY business Hombase to Australian retailer Bunnings would not be affected by Steinhoff’s proposal - it is only interested in Argos.

 

 

 

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