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    Sainsbury getting Argos on the cheap.

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    papa_umau
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    Sainsbury getting Argos on the cheap.

    Post by papa_umau on Tue 02 Feb 2016, 12:08 pm

    "Sainsbury's Argos takeover is as cheap as a Fisher Price toy set"

    The supermarket chain is using Home Retail's existing cash and loan book to finance the deal.

    By Ashley Armstrong of The Telegraph.

    "Essentially, we're buying Argos for around 250m," Sainsbury's finance boss John Rogers trumpeted this morning.

    That number might leave some scratching their head this morning. After all, 1.3bn is the takeover price the City was expecting for Argos parent, Home Retail Group.

    Firstly, Sainsbury's takeover offer is only really worth 1.1bn. The grocer is topping up its offer with cash Home Retail was already due to pay its shareholders: 200m of proceeds from the sale of its DIY chain Homebase, worth 25p-a-share, and a 2.8p-a-share payout Home Retail would have handed to investors as a final dividend.




    SO....what I see here is a rather nasty and incestuous deal to get Argos on the cheap.

    Homebase is going down the tubes to help to finance this deal

    Sainsbury's is transferring Argos's loan book, worth 600m, to its own bank and is using its bank customer deposits to finance the loan book.




    And here was me thinking that the big supermarkets, including Sainsbury, were struggling to survive against the severe price cutting of the Aldi and Lidl discounters.

    Anybody ?


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    zathrus
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    Re: Sainsbury getting Argos on the cheap.

    Post by zathrus on Thu 04 Feb 2016, 11:50 am

    That looks like a very complicated bit of hokus-pokus and if Sainsbury's don't watch out this could blow up in their faces.

    Personally, I would be quite happy to see this happen as I have never liked Sainsbury's.
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    papa_umau
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    Re: Sainsbury getting Argos on the cheap.

    Post by papa_umau on Fri 05 Feb 2016, 12:39 pm

    I too am always hard down on the big supermarkets as they think they can get away with just about anything because of their size.

    Here is another point about this amazing cheap-and-nasty takeover:

    Sainsury's took over the Argos loan book and put it into their own bank, which also contributed to the cheap takeover of Argos.


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    Angie baby
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    Re: Sainsbury getting Argos on the cheap.

    Post by Angie baby on Sat 06 Feb 2016, 12:00 pm

    I had already noticed that the Argos main store in my area had closed down and was moved to a corner of the local Sainsbury's.

    I don't know if Argos can uphold their recent promises of "no-waiting" for their "Click and reserve" or "Fasttrack" orders made online when Sainsburys is going to shrink them down to save costs.

    Something usually has to go when such takeovers are put in place.
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    papa_umau
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    Re: Sainsbury getting Argos on the cheap.

    Post by papa_umau on Sun 07 Feb 2016, 12:32 pm

    Dead right Angie, as usually after any aggressive takeover the company that has been swallowed up is stripped to the bone.

    That is why this trait is called "asset stripping".

    Mind you I don't think this is going to happen too severely at Argos.


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    Hell's Granny
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    Re: Sainsbury getting Argos on the cheap.

    Post by Hell's Granny on Sat 13 Feb 2016, 4:18 pm

    We have two Sainsbury's stores in my town, neither of them is large, so I doubt they will kill off our medium sized Argos either.
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    papa_umau
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    Re: Sainsbury getting Argos on the cheap.

    Post by papa_umau on Sun 14 Feb 2016, 12:31 pm

    I have always said that small is beautiful, and this goes for store chains also, I guess.

    Mind you, sometimes they shut down the little stores as they are just not generating enough throughput and revenue.

    Most of the small Tesco Express stores are getting shut down for this precise reason.


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