Sainsbury's made a bid for Home Retail Group in November

Sainsbury's says it made an offer for Argos and Homebase owner Home Retail Group in November, but that the offer was rejected.

"The combination of Sainsbury's and Home Retail Group is an attractive proposition for the customers and shareholders of both companies," it said in a statement.

Sainsbury's said it was now "considering its position".

But it cautioned there was no certainty this would result in a formal offer.

Over the past year Sainsbury's has been trialling Argos concessions in some of its stores, and the supermarket group said the two firms had "complementary products".

In its statement, Sainsbury's outlined its case for buying Home Retail Group saying it would boost sales growth, improve its delivery networks, and mean they could sell to each other's customers.

Home Retail Group's shares surged 25% immediately after the announcement, while Sainsbury's fell 5%.

Excerpts from the announcement can be found below while the full text can be found here: http://otp.investis.com/clients/uk/home-retail-group/rns/regulatory-story.aspx?cid=333&newsid=641383

Sainsbury plc ("Sainsbury's") confirms that it made an approach in November to Home Retail Group plc's ("Home Retail Group") Board of Directors regarding a possible offer for Home Retail Group, in the form of Sainsbury's shares and cash. The approach was rejected by Home Retail Group and Sainsbury's is considering its position. There can be no certainty that this will result in a formal offer, nor as to the terms of any such offer. 

Over the last year, Sainsbury's has been working in partnership with Home Retail Group trialling a number of Argos concessions in Sainsbury's stores. The Board of Sainsbury's believes the combination of Sainsbury's and Home Retail Group is an attractive proposition for the customers and shareholders of both companies, establishing a platform for long-term value creation. The combination is an opportunity to bring together two of the UK's leading retail businesses, with complementary product offers, focused on delivering quality products and services at fair prices, through an integrated, multi-channel proposition."  

Source : BBC News

www.bbc.co.uk/news/business-35232254