Home Retail shareholder Old Mutual supports Sainsbury's offer

It said on Wednesday that it regards the offer as “fair”, taking into account the acceleration of the Argos transformation plan within Sainsbury’s.

Old Mutual noted the agreed terms were below the 200p per share level it had been quoted by the media as looking for after the initial approach by Sainsbury’s.

However, Old Mutual said that given the agreed disposal of Homebase since then, the update on Christmas trading and more detail on the opportunities for Home Retail within the Sainsbury group, the offer now appeared fair.

“Following discussions with representatives of both parties, we have concluded that the terms of the agreed offer are fair, reflective of the future potential of the Argos business and the risk still associated with the transformation plan.”

On Tuesday, Home Retail and Sainsbury’s said they had come to an agreement over the terms of a deal that values Home at about £1.3bn.

Home Retail shareholders will receive 55p in cash and 0.321 Sainsbury’s shares for each of their Home shares.

They will also receive a payout of 25p per share to reflect the £200m capital return from the sale of Homebase and 2.8p in lieu of a final dividend in respect of the financial year ending 27 February.

At 1028 GMT, Home shares were down 0.1% to 152.80p while Sainsbury’s was down 1.2% to 247.60p.