It’s looking like the bid for Argos is going to go through.

Home Retail Group’s third largest investor, Old Mutual, has verbalised their support for the Sainsbury bid at the current price.

This is a fairly significant change in stance because previously Old Mutual claimed Sainsbury’s £1.3bn bid was too small – instead they proposed that they would only accept a bid of 200p per share (valuing Home Retail Group at £1.63bn).

Sainsbury’s originally bid for Home Retail Group prior to the announcement that Homebase was being sold to Wesfarmers, an Australian retail group seeking to enter the UK DIY market. Home Retail Group has since agreed to a break fee with Wesfarmers of £3.4m if the deal doesn’t go through.

Fortunately for Sainsbury’s, Homebase didn’t appear to be their target at all –  so the offload seems to have helped in the acquisition of Argos.

Now, The UK’s second largest supermarket has three weeks to examine Home Retail’s books before making a firm offer that will be brought to shareholders. The move is motivated by the desire to be larger than John Lewis in non-food sales, competing with them as a truly omni-channel company.

According to the most recent (2 Feb, 2016) Analyst Call Sainsbury’s is basing the bid not only on their vision of the future but on the promising Argos ‘store-within-a-store’ trial conducted at 10 sites across the UK.

Learn More:

Home Retail Possible Offer – J Sainsbury plc

Six things you need to know about Sainsbury’s bid for Home Retail Group

Aldi and Lidl double market share in three years

Old Mutual backs Sainsbury’s Home Retail Group takeover