Old Mutual backs Sainsbury's £1.3bn bid for Argos owner

Falls short of 200p per share demands

Old Mutual has publicly backed Sainsbury's latest £1.3bn cash and shares offer for Argos-owner Home Retail Group, where the insurer is currently the third largest shareholder.

Despite previously calling for a bid of at least 200p per share, Old Mutual said Sainsbury's latest offer of 161.3p a share was "fair". The deal was announced yesterday and stipulates that Home Retail Group investors will receive 0.321 Sainsbury's shares and 55p in cash per share. Additionally, they will receive around 25p per share and a further 2.8p to replace a dividend due to be paid on 27 February, according to City AM. Old Mutual owns a 3.6% stake in Home Retail, while Richard Buxton, manager of the £2.3bn Old Mutual UK Alpha fund, currently has exposure to the supermarket vi...