Shares in FTSE 100 supermarket behemoth Sainsbury's have rocketed to their highest level in over a decade following brief discussions to offload Argos to Chinese e-commerce titan JD.com.
Sainsbury's stock price has leapt by nearly five per cent in early trading this morning to 322p, as reported by .
This valuation represents the company's peak share price since the 323p they achieved in April 2024.
The º£½ÇÊÓƵ's second-largest grocery retailer has witnessed a share price boost as investors responded to weekend revelations.
Sainsbury's equity began 2025 valued at 275p and dropped as low as 228p in April.
Sainsbury's terminates Argos talks with JD.com
On Saturday, Sainsbury's announced it was engaged in negotiations concerning a possible disposal of its Argos division to JD.com, one of China's largest retailers, a transaction it suggested could "accelerate Argos' transformation".
However, on Sunday, it confirmed it had "terminated" talks regarding a potential sale, stating JD.com's terms and commitments were "not in the best interests of Sainsbury's shareholders, colleagues and broader stakeholders".
Argos stands as the º£½ÇÊÓƵ's second-largest general merchandise retailer, boasting the third most-visited retail website in the º£½ÇÊÓƵ and over 1,100 collection points. In a statement released on Sunday, Sainsbury's announced: "JD.com has communicated that it would now only be prepared to engage on a materially revised set of terms and commitments which are not in the best interests of Sainsbury's shareholders, colleagues and broader stakeholders.
"Accordingly, Sainsbury's confirms that it has now terminated discussions with JD.com."
The statement further added: "We are taking focused action to extend range, enhance digital capabilities and improve relevance to grow frequency and spend in Argos whilst delivering further operating model efficiencies."
Sainsbury's stated that it continues to experience "strong momentum" in its business and remains committed to executing its Next Level strategy.
JD.com, which entered the e-commerce sector in 2004, became the first major e-commerce company from China to be listed on the Nasdaq in May 2014, as per its website.
'Splitting Argos from Sainsbury's won't be easy'
Dan Coatsworth, an investment analyst at AJ Bell, remarked: "The firing gun has effectively been triggered on the sale of Argos. Sainsbury's might have rejected an offer from Chinese retailer JD, but the fact it hasn't come out and said the business isn't for sale at any price is telling."
"Sainsbury's has talked up a food-first strategy for some time, implying that Argos wasn't core to its long-term plans."
"The general merchandise business hasn't been performing well for a few years, and it always seemed like Argos concessions were tucked away in the corner rather than being a prominent part of a Sainsbury's store."
"Sainsbury's rejection statement gave the impression that Chinese retailer JD's offer wasn't in the best interests of shareholders, staff and stakeholders."
"That suggests the price wasn't high enough, there was no guarantee about retaining jobs, and nothing to reassure suppliers who had long-standing relationships with Argos that they would still be used."
"This demonstrates Sainsbury's management is considerate and doesn't want to sell Argos to a party who only has its own interests at heart."
"Separating Argos from the supermarket group won't be straightforward, but not impossible. Sainsbury's has gradually reduced the number of standalone Argos stores in the º£½ÇÊÓƵ, relocating more of them inside its supermarket stores."
"There are still remnants of a high street store estate from which to rebuild a physical presence, but if the new owner wants to be digital-only there aren't too many physical shops to close down."
"Sainsbury's is unlikely to let a new owner continue operating inside its supermarket stores, particularly as it could use the floor space to expand its food range, which would align with its strategic priorities."
"That would mean a new owner must either rely on the remaining store estate, open more stores, or think hard about making Argos a digital-only brand."
"A new owner of Argos could strike deals with other retailers to set up in-store collection points. A third-party retailer might welcome the additional revenue from holding Argos inventory in its stores."
"If that proved impossible, an alternative route is to simply use collection lockers such as InPost if someone didn't want an item sent directly to their home."
"Part of Argos' unique selling point is being able to deliver goods quickly to customers, many on the same day."
"Removing that USP because of a takeover would mean Argos would lose its edge over many retailers."
"AO might be interested in owning Argos as a digital-only brand to broaden its interests beyond electrical appliances."
"AO already has a strong logistics network and a reputation for speedy service. Its overseas ventures didn't work out, so it retrenched and focused on getting the º£½ÇÊÓƵ arm in a stronger position. That's now been achieved so AO will be looking at strategic options for the next chapter in its career."
