Sainsburys reveals Argos takeover attempt

Friday, January 8, 2016 - 13:27 by Mike Price

his week saw supermarket chain Sainsbury’s admit that it had made a bid to buy the Home Retail Group, which is responsible for major high street outlets, including Argos and Homebase. And although the bid was not successful, it still has a few weeks to reconsider its options and make a higher offer, according to the Guardian.

The bid was made back in November of last year, with Sainsbury’s putting a combination of cash and shares on the table, to try and tempt people to part with their stake in the group so that it could take majority ownership.

Worth an estimated £1 billion, this offer is being seen as extravagant by some and desperate by others, with the Independent arguing that Sainsbury’s is exhibiting all the signs of being put in a corner by the rise of safe shopping online. One example of this is the recent announcement of Amazon’s intention to enter the grocery market in the UK, which will be a big problem for every traditional supermarket.

Of course, the prospect of the merger of some of the biggest names in bricks and mortar retail is not a black and white issue, with people on all sides of the debate taking differing views of whether this move is beneficial. There are rumours that the Qatari Investment Authority would look to block any subsequent takeover attempt by Sainsbury’s, in which it holds a 25.1 per cent stake, unless a different approach is adopted.

In whatever way Sainsbury’s chooses to proceed, the fact of the matter is that for consumers in the UK, shopping online has become a huge part of their retail experience. And while brand loyalty may be important, the arrival of newcomers on the scene, offering affordable, convenient grocery deliveries, is likely to win over many people.