Sainsbury's bids for Argos owner Home Retail Group

Supermarket chain Sainsbury's has made a formal £1.4bn bid for Argos owner Home Retail Group (HRG).

Its move came shortly after a rival suitor for HRG, South Africa's Steinhoff International, withdrew from the takeover battle.

Sainsbury's cash and shares offer values HRG shares at 172.3p each.

Under UK takeover rules, both Sainsbury's and Steinhoff had been set a deadline of 17:00 GMT to make a firm offer or walk away.

The board of HRG said it had noted the announcement by Sainsbury's, and that it looked forward to working with them towards a recommendation of the offer.

In a statement, Sainsbury's chairman David Tyler said: "The UK grocery retail industry is undergoing a period of intense change in customer shopping behaviour and in the competitive environment.

"This combination with HRG presents an opportunity to accelerate our strategy, delivering compelling revenue and cost synergies.

"We will create a multi-product, multi-channel proposition with fast delivery networks that we believe will be very attractive to the customers of both businesses."

Separately, Steinhoff said on Friday that it had offered £673m ($975m) for Darty, Europe's third biggest electrical goods retailer.

That topped a rival bid from a French retailer Fnac, with the Darty board saying it would recommend the offer to shareholders.