Argos owner faces wait for approval on Sainsbury’s takeover

Argos owner Home Retail, which agreed last month to be taken over by British supermarket Sainsbury’s, said yesterday it did not expect to hear what the UK competition regulator thinks of the deal until August.

The home and general merchandise retailer’s board recommended a £1.4 billion cash and shares bid from Sainsbury’s last month. The deal is expected to complete in the third quarter of this year, assuming there is no major intervention from the Competition & Markets Authority.

Some analysts fear the deal could yet be delayed by a long wait for regulatory approval.

"The likely timetable for us for having any feedback, at the very earliest it's going to be some time in the summer . . . probably August would be our best guess," said Home Retail finance director Richard Ashton.

"We would think that we wouldn't have issues over time but it's too early to tell," chief executive John Walden added.

Sainsbury’s wants Argos to accelerate its growth by creating Britain’s largest general merchandise retail business and by expanding online.

Home Retail yesterday reported a 28 per cent fall in annual profit, reflecting tough markets and increased investment.

It made an underlying pretax profit of £94.7 million (€121.6 million) for the year to February 27th, down from the £132.1 million made in 2014- 2015. However, it beat analysts’ average forecast of £93 million.

Group sales fell 1 per cent to £5.67 billion pounds. They were flat at Argos and down 3 per cent at Homebase. In February, Home Retail sold Homebase to Australian group Wesfarmers for £340 million.

Home Retail said recommendation of Sainsbury’s offer resulted in an exceptional goodwill impairment charge of £852 million, leading to a total loss after tax for the 2015-2016 year of £808 million.

Mr Walden declined to comment when asked if Home Retail/Argos’s top management wanted to stay after the takeover. – (Reuters)