TSCDY Tesco PLC (PK)

By John J. Edwards III 

LONDON--U.K. retailer J Sainsbury PLC said Tuesday it made a cash-and-stock offer in November for rival Home Retail Group PLC, parent of Argos and former Sainsbury unit Homebase, whose market capitalization was GBP802.9 million ($1.18 billion) as of Monday's close.

Sainsbury, the No. 3 U.K. supermarket chain by market share after Tesco PLC and Wal-Mart Stores Inc.'s Asda, said Home Retail rejected the approach and no further approach or formal offer is certain. Sainsbury didn't disclose the value of its November offer.

Home Retail shares, which were already moving up Tuesday morning, soared after Sainsbury's midday announcement. They were lately up more than 31% at 130 pence in London trading. Home Retail had traded above 200 pence less than a year ago but has declined sharply as the company's stores have struggled in the tough U.K. retail environment.

Sainsbury shares were down 4.3% to 244 pence Tuesday afternoon.

Sainsbury and a Belgian retailer co-founded what was then known as Sainsbury's Homebase in 1979. Sainsbury sold the Homebase chain in 2000.

Under U.K. takeover rules, Sainsbury has until Feb. 2 to make a firm offer for Home Retail or walk away.

Ian Walker contributed to this article.

Write to John J. Edwards III at john.edwards@wsj.com

(END) Dow Jones Newswires

January 05, 2016 08:23 ET (13:23 GMT)

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