Sainsbury and Home Retail said to near agreement on price

Home Retail shares surged on Monday following a report that it was nearing an agreement with Sainsbury on the price the supermarket retailer will pay for the Argos owner.

Bloomberg cited people familiar with the matter as saying that a price of between 160p and 165p a share was being discussed and that the companies may seek an extension as they look to iron out the details.

Sources said Home Retail might ask the UK’s Takeover Panel to extend the 2 February deadline by which Sainsbury needs to either announce a firm intention to make an offer or walk away.

The sources said no final decision has been reached and negotiations may still fall apart.

Sainsbury’s announced in January that it was still mulling an offer for Home Retail after its first approach for the FTSE 250 retail group in November was rebuffed.

At 1515 GMT, Sainsbury’s shares were down 0.9% to 242.90p, while Home Retail was up 7.5% to 146.90p.