Last checked at 
LONDON (Alliance News) - Home Retail Group PLC Monday said the deadline by which J Sainsbury PLC must make a firm offer or walk away from the potential deal to acquire the owner of Argos and Homebase has been extended.
Home Retail Group said the deadline by which Sainsbury must make an offer has been extended by the Panel on Takeovers and Mergers to March 18 from the original date of Tuesday this week.
The extended deadline for Sainsbury to make an offer coincides with the deadline by which Steinhoff International Holdings NV has to make a firm offer or walk away from the deal, which is also on March 18.
Steinoff disrupted the potential deal between the two London-listed firms last week by making its own offer for Home Retail.
"There can be no certainty that Sainsbury's will proceed to make a firm offer for Home Retail Group. A further announcement will be made in due course," said Home Retail.
Home Retail and Sainsbury had reached an agreement on the key financial terms of a possible offer from Sainsbury, but the new offer from Steinhoff last week has disrupted the potential deal.
Steinhoff is a Frankfurt-listed company and the owner of bed retailer Benson for Beds and furniture store Harveys in the UK, and has other brands operating in Australasia, Europe and Africa.
Both companies are eyeing up the Argos brand, as Home Retail is progressing the sale of Homebase to Australian conglomerate Wesfarmers Ltd, which is expected to be finalised before the end of the first quarter of 2016.
Steinhoff has put forward a proposal to Home Retail seeking its recommendation for a possible all-cash offer, which would be for 175.0 pence per Home Retail share - considerably higher than the deal currently on the table from Sainsbury.
The overall value of the current Sainsbury offer implies a price of around 161.3p per Home Retail share, meaning Steinhoff's offer is around 8.5% higher than Sainsbury's offer.
Steinhoff said its all-cash offer would be comprised of 147.2 pence per share in cash followed by another 25.0p payment per share from the sale of Homebase, and another 2.8 pence payment per share in lieu of a final dividend in respect of the financial year ending February 27, 2016.
Under the deal with Sainsbury, Home Retail shareholders would receive 0.321 of a new Sainsbury's share and 55.00p in cash for each Home Retail share, plus the 25.0 pence per share from the Homebase sale.
Home Retail shares closed up 13% to 173.70 pence per share on Monday whilst Sainsbury shares closed down 2.3% to 255.20p.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
