Analyst view on Home Retail Group bid as shares rise by nearly 40%

It was reported yesterday that supermarket chain Sainsbury's had made a bid for Home Retail Group in November last year.   

Today, Connor Campbell, a senior market analyst at www.spreadex.com, gave us his view on how this will affect the markets going forward.

"After an astonishing surge (by Home Retail Group) and a sharp fall (by Sainsbury’s) in the immediate aftermath of the rejected bid reveal, Wednesday has seen somewhat of a reversal, the supermarket (just about) clawing back some growth whilst the troubled retailer loses some of its lustre.

"In terms of the bid itself, there are questions over how sensible it would be for Sainsbury’s, already in a tough sector, to take on the burden of Argos, a store facing the seemingly insurmountable threat from Amazon. From Home Retail’s perspective however a takeover appears to be one of the few ways left for the company to try and turn its situation around."

Source : Insight DIY Team