London - Steinhoff International Holdings made a 1.4-billion-pound ($2 billion) counter bid for Britain’s Home Retail Group, taking on J Sainsbury for control of the Argos stores owner.
The all-cash proposal values each Home Retail share at 175 pence, Steinhoff said in a statement after European markets closed on Friday. That’s more than the 161.3 pence a share in cash and stock that Sainsbury agreed to pay earlier this month.
Steinhoff unexpectedly entered the fray just days before a February 23 deadline for Sainsbury to make a formal offer, seeking to gain control over more than 800 shops selling everything from jewellery to televisions. The furniture retailer switched its primary listing from Johannesburg to Frankfurt in December, reflecting Europe’s increased importance to a company that’s now based in Amsterdam.
Home Retail confirmed it received the approach, which it said it’s reviewing. Steinhoff said it’s seeking a recommendation from the U.K. company and has a deadline of March 18 to make a formal bid under British takeover rules.
European presence
Home Retail would further increase Steinhoff’s presence in Europe, where it gets more than half its 135 billion rand ($8.8 billion) of sales from operations in the UK, France and Germany. Founded in Germany in 1964, the business listed in Johannesburg a year after the 1997 acquisition of a stake in a South African furniture company.
A takeover of Home Retail would be Steinhoff’s biggest since it bought South African clothing retailer Pepkor Holdings for R62.8 billion in 2014. It would also represent a departure from recent comments by Chief Executive Officer Markus Jooste that the company is focused on expanding its existing brands, rather than making acquisitions.
Steinhoff said its offer comprises 147.2 pence a share in cash, plus a 2.8 pence dividend and 25 pence to reflect Home Retail’s sale of the Homebase UK home-improvement chain to Australia’s Wesfarmers.
BLOOMBERG