LONDON (Reuters) - Old Mutual Global Investors (L:OML), which has a 3.6 percent stake in Argos-owner Home Retail (L:HOME), said on Wednesday it regards Sainsbury 's cash and shares proposal for its holding to be fair.
British supermarket Sainsbury's (L:SBRY) has bid 1.3 billion pounds to take over Home Retail (L:HOME), valuing each share at 161.3 pence.
The investment group, one of Home Retail's largest shareholders, noted the agreed terms were below the 200 pence per share level which appeared in remarks it gave to the media after the initial approach by Sainsbury's to Home Retail became public knowledge on Jan. 5.
But since then Home Retail has agreed the disposal of its Homebase business and published its Christmas trading update, while more detail on the opportunities for Home Retail within Sainsbury's has been released.
"Following discussions with representatives of both parties, we have concluded that the terms of the agreed offer are fair, reflective of the future potential of the Argos business and the risk still associated with the transformation plan," Old Mutual said.
Shares in Home Retail were down 0.2 percent at 152.8 pence at 1043 GMT, while shares in Sainsbury's were down 1.2 percent at 247.6 pence.