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Sainsbury’s was given a clear run to buy Argos-owner Home Retail for 1.4 billion pounds after rival suitor, South Africa’s Steinhoff International, dramatically withdrew from the race

Under UK takeover rules, both companies had until Friday to make a firm bid for Home Retail and investors had expected a raised offer from one or both in a rare contested bid situation.

“Steinhoff now confirms that it does not intend to make an offer for Home Retail,” it said in a statement to the London Stock Exchange.

At the same time, Steinhoff’s French unit Conforama said it had agreed a 673 million pounds deal to buy Darty Europe’s No. 3 electrical goods retailer, trumping a competing bid from French retailer Fnac,  That transaction would bulk up Steinhoff’s presence in Europe, where it already makes more than two-thirds of its 9.8 billion euros ($11.1 billion) of annual sales.

However, the firm will not now be adding Argos to its UK stable of Bensons Beds and the Harvey’s furniture chains. Shares in Home Retail had soared more than 80 percent after news of a possible bid from Sainsbury’s emerged on Jan. 5. They closed down 9.9 percent at 164 pence on Friday, valuing the firm at 1.2 billion pounds, after hopes of a bidding war faded.

Shortly after Steinhoff pulled out, and after the stock market had closed, Sainsbury’s announced a firm cash and shares offer valuing each Home Retail share at 173.2 pence, on the same terms as an earlier proposal.

Since that proposal was made on Feb. 2, Sainsbury’s share price has risen 12.5 percent, thereby increasing the value of its offer by 6.2 percent.

Also, after examining Home Retail’s books, Sainsbury’s now expects a higher level of synergies from the deal – not less than 160 million pounds in the third full year after completion, compared with earlier guidance of not less than 120 million.

It has not received the Home Retail board’s recommendation for its bid, but is seeking it.

Home Retail said it looked forward to working with Sainsbury’s toward a recommendation and Sainsbury’s Chief Executive Mike Coupe expressed confidence it would come. “You can see from the wording of the (Home Retail) statement that it’s pointing in the right direction,” he told reporters.

Commenting on Steinhoff’s withdrawal he said: “Nothing surprised me through this process and we’re really pleased with where we’ve got to.”

Sainsbury’s, which on Tuesday reported its first quarterly sales increase in more than two years, wants to buy Argos to accelerate its growth by creating Britain’s largest general merchandise retail business and by expanding its online presence. “We believe it creates a multi-product, multi-channel proposition with fast delivery networks that will be very attractive for all our customers,” added Coupe.

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