A possible deal between British supermarket chain J Sainsbury (SBRY) and Argos-owner Home Retail Group (HOME) is looking more likely following a joint update from both companies. Roughly 10 hours ahead of a regulatory deadline, the two companies managed to thrash out basic terms for a takeover, which would see Sainsbury's pay the equivalent of 161p a share in a combination of cash and shares to Home Retail shareholders - a marked increase over its initial 150p bid. Investors would receive 55p a share in cash and 0.321 Sainsbury's shares per Home Retail share. All scheduled dividends as well as a one-off capital return following the sale of Homebase to Australian buyer Wesfarmers remain unaffected. In aggregate, Home Retail shareholders would own 12 per cent of the combined group.
Home Retail bosses say they will recommend the current set of terms to shareholders although the deadline for a firm offer has been extended to 23 February 2016 to allow both sides to complete the relevant due diligence work.
