(MENAFN- ProactiveInvestors)Frankfurt-listed retailer Steinhoff International has made a late bid to gate-crash the Sainsbury/Home Retail engagement party. Steinhoff which owns the Benson's Beds and Harvey's retail brands in the UK confirmed after the market closed on Friday it had made a bid approach to Argos-owner Home Retail (LON:HOME) that could derail the proposed Sainsbury (J) (LON:SBRY) takeover. Sainsbury's is currently performing due diligence on Home Retail having provisionally agreed to buy the company for about £1.3bn and has until 5.00pm on Tuesday 23 February to announce a firm offer or walk away. Sainsbury's offer is currently worth 165.3p per Home Retail share including the proposed 25p per share capital return and the 2.8p final dividend announced by the Home Retail board whereas Steinhoff has indicated it is prepared to offer 147.2p cash per share which together with the capital return and final divi makes its offer worth 175p per share. Home Retail's shares climbed 18.7p to 172.3p on Monday morning whereas Sainsbury's shares fell 4.4p to 256.7p. Home Retail Group (HRG) is in the process of offloading its Homebase chain and Steinhoff confirmed it is supportive of this disposal. It offered the usual caveats that there is no guarantee that it will make a formal bid for Home Retail and reserved the right to offer less than 147.2p per share should it decided to launch a takeover attempt. The board of Home Retail said it is reviewing the Steinhoff proposal and advises shareholders in the meantime to take not action. Broker Cantor Fitzgerald said Sainsbury's is likely to look for an extension to the 'put-up or shut-up' period and expects it to at least match the Steinhoff offer which being all cash is more attractive than the UK retailer's offer of 0.321 Sainsbury's shares plus 55p cash. 'For Steinhoff the offer is about increasing market presence in Europe where the company already has relatively strong base in furnishings bedding and electricals through its ownership of Benson Beds Harvey's and Conforama in France. In contrast Sainsbury (SBRY LN – HOLD – TP 270p) is looking to enhance Argos's expertise in fulfilment at a time when there has been explosive growth in m-commerce and 'click and collect'' Cantor Fitzgerald's retail analyst Freddie George said. Shore Capital said it was not surprised that a counter-bid was on the cards as Sainsbury's predominantly equity-based bid put the Argos business in play. 'Indeed whilst there are no signs of activity we felt that Asda (Wal-Mart WMT NR CNP) should have dusted off the Argos file with the business in-play' Shore's Clive Black said. 'Sainsbury's has been very opportunistic creative and entrepreneurial with its bid for HRG to our minds including the utilisation of the debtor book and the combination with Sainsbury's Bank; however Sainsbury's management has also repeatedly stated that it will not overpay for the Argos business' Shore noted adding that there is still the possibility that the Competition & Markets Authority 'may yet poke its nose into any firm Sainsbury's offer' for Home Retail.
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