Sainsbury’s bid for Home Retail Group (or Argos to be more precise) continues to dominate the business news in this morning’s papers.
The Sky News story that Home Retail Group was in advanced talks to sell Homebase to Australian rival Wesfarmers for £340m (later confirmed by Home Retail itself), could “could pave the way for Sainsbury’s to take over Argos”, according to The Times (£).
Coupe insisted Sainsbury’s Sainsbury’s is not prepared to do a deal “at any price” (The Telegraph), but not all are convinced the deal makes strategic sense after Mike Coupe laid out his case yesterday. “Home truths expose superficial justification for Sainsbury’s move”, writes the FT’s Lombard column, imaging an awkward conversation between Coupe and his daughter (The Financial Times £), while the paper also says the supermarket “failed to convince several top shareholders of the benefits of its pursuit of Home Retail Group despite a charm offensive designed to win over critics of the deal”. The paper quotes on shareholder as saying the presentation didn’t tell them anything they already didn’t know. (The Financial Times £)
Ashley Armstrong in the Telegraph says Mike Coupe “seems to be comparing apples with oranges”. “It is laughable to suggest that Argos’s distribution network, for all its shiny vans and iPads, is purpose built for Sainsbury’s”. (The Telegraph)
Similarly The Guardian’s Nils Pratley writes: “The supermarket chain’s shareholders will surely want to see something more substantial than Wednesday’s 22-page presentation that contained all the details except the important ones.” (The Guardian)
A slightly more supportive Alex Brummer in the Mail advises that Sainsbury’s keep things cordial with Home Retail. “Keeping the deal friendly would be much more sensible as it would allow a more detailed look at the books. There are risks as with any deal – at least this one looks to the future in a grocery market where the players are knocking seven bells out of each other.” (The Daily Mail)
Sainsbury’s would take the axe to Argos if it pursues a takeover of owner Home Retail Group, the supermarket has revealed after the chain posted a better-than-expected Christmas performance today. It is understood that if a follow up bid is successful Sainsbury’s could close up to 200 of 734 existing Argos stores, bringing them into its supermarkets as concessions. (The Daily Mail)
Meanwhile, Sainsbury’s Christmas performance has been somewhat overshadowed by the circus around its Argos bid. The Guardian writes: “Sainsbury’s sales over Christmas were better than expected, in the latest sign that Britain’s supermarkets are fighting back against the German discounters Aldi and Lidl.” (The Guardian)
Elsewhere, flagging retail brands may make this a year for dealmaking, writes The Telegraph “Perhaps some of the more traditional bricks and mortar names will seek salvation in the arms of a fellow straggler this year” (The Telegraph).
The FT agrees, more M&A is on the horizon, but amongst food producers. “The [Kraft/Heinz] merger was one of the largest M&A deals last year and the biggest in food, signalling a trend towards greater consolidation among large, legacy food brands, especially among companies in the US such as General Mills or the Campbell Soup Company.” (The Financial Times £)
Petrol and diesel are set to become cheaper than bottled water after a collapse in the value of oil, experts have predicted. The RAC said that fuel prices may drop as low as 86p a litre — the lowest for at least seven years — after a dramatic fall in wholesale costs. (The Times £)
The Guardian follows The Grocer’s scoop that crisp maker Kettle Chips is hoping to take a bite out of the European popcorn market by buying a 26% stake in Metcalfe’s Skinny for an unknown sum. (The Guardian)