J Sainsbury offers only modest increase to reported 130p per share initial offer for Home Retail Group
The UK-based supermarket group J Sainsbury [LON:SBRY] is proposing only a modest increase to its reported initial offer of 130p per share for Home Retail Group [LON:HOME], the Financial Times reported. The newspaper’s market report section did not cite a source for the speculation.
J Sainsbury’s improved offer would likely fall short of the price at which HRG’s board would recommend the bid by a minimum of 50p per share, according to traders cited by the report.
Separately, the item noted that HRG’s second-largest shareholder Toscafund has cut its stake in the retail holding company by 7.25%. Toscafund founder Martin Hughes has been critical of HRG’s management over their rejection of J Sainsbury’s initial offer without talking to shareholders first, the article added.
An analyst cited by the report said any bid higher than 135p per share would represent a premium compared to the retail sector in general. Such an offer could be justified only by a “strategically compelling” deal, the analyst argued.
Home Retail Group’s share price closed 7.1p down at 142.5p in London yesterday, 28 January, valuing the company at GBP 1.15bn