Sainsbury’s ‘committed’ to buying Argos despite Brexit
Despite the economic turmoil in the wake of the Brexit vote, Sainsbury’s said it felt “confident” that its bid to buy Argos owner Home Retail Group (HRG) would create “a much stronger business for the future”.
In a BBC online report, Sainsbury’s chief executive Mike Coupe said it was still “committed” to buying HRG despite the result.
“We remain absolutely convinced by the strategic rationale,” he said.
In April, the supermarket giant agreed a bid of £1.4 billion to take over Home Retail Group, with the purchase consisting of Sainsbury’s shares and cash.
However, in the past three months, Sainsbury’s shares have fallen 19 per cent, which has reduced the value of the deal to around £1.3bn.
In the prospectus for the acquisition, it noted that economic conditions had changed since the takeover was announced, but Mr Coupe said it was still “very early days” in judging the impact of Brexit on the combined business.
“There is a slight danger that we talk our way into an economic downturn as well,” he said. “To predict the future off 10 days’ worth of data I think is impossible.”
The prospectus also confirmed the supermarket’s intention to employ 1,000 more staff as a result of the deal, driven by its plan to create more click-and-collect points.
Sainsbury’s is hoping to complete the deal by September, but it still under scrutiny by the competition regulator, which will decide by July 25 whether or not to launch a full inquiry.