Sainsbury's bid for Argos owner threatened by rival Steinhoff offer

Supermarket Sainsbury's could see its takeover bid for Argos owner Home Retail Group derailed after retailer Steinhoff pitched a rival offer.

Home Retail Group confirmed that it had received a "possible cash offer" from the South African-based furniture retailer valuing the company at 175 pence per share.

The announcement comes after Sainsbury's vowed to create a ''world-leading'' retailer bigger than rivals John Lewis and Amazon UK when it tabled an improved £1.3 billion offer for Home Retail Group earlier this month.

The supermarket giant had proposed a cash-and-shares deal - valuing Home Retail Group at 161.3 pence per share - which would create the UK's largest non-food store worth £6 billion.

Saisnbury's declined to comment on the rival bid. It will now have to make a firm offer for Home Retail Group by Tuesday Ferbuary 23.

Home Retail Group said it was reviewing the approach with its advisers, but added that there was no guarantee Steinhoff would make a firm offer.

Steinhoff - which owns UK furniture firm Harveys - is listed on the Frankfurt and South African stock markets.