J Sainsbury’s takeover talks with Home Retail Group at impasse over price
J Sainsbury’s [LON:SBRY] negotiations with Home Retail Group [LON:HOME] about a takeover of the UK-based retail holding company have stalled due to differences on price, the Financial Times reported. The newspaper cited people close to the matter for the information.
The item noted that J Sainsbury faces a deadline of 5pm Tuesday, to state its intentions regarding a formal offer for HRG. Both companies remain in contact and may yet make progress before the deadline, the article added.
It is thought, however, that J Sainsbury is not prepared to offer more than around 150p per share, or about GBP 1.22bn (EUR 1.60bn) for HRG, the report said. HRG wants about 170p per share, according to a person cited by the newspaper.
HRG and J Sainsbury, an FTSE-100 supermarket group, both refused to comment, the item said.
Separately, the report said Odey Asset management, a hedge fund, has added to its short position in HRG, hoping to profit from a fall in the retailer’s share price. Odey doubts that the two parties will agree a deal, with Odey founding partner Crispin Odey telling Bloomberg News that he believes J Sainsbury’s shareholders will not back a higher offer.
The article went on to cite data from the Markit information service which indicated that J Sainsbury’s shares are the most heavily shorted in the FTSE-100. 17% of the supermarket group’s shares are being shorted, although most of those positions were taken out before J Sainsbury disclosed on 5 January that it had approached HRG, the newspaper said.
Home Retail Group’s share price closed 5.8p down at 136.7p in London on Friday, 29 January, giving the company a market capitalisation of GBP 1.11bn.