UK supermarket chain Sainsbury's is proposing to takeover Argos owner Home Retail Group in a deal worth stg1.3bn (€1.71bn).

The supermarket has made a so-called 'possible offer' of 161.3 pence per share.

If the deal goes ahead, Home Retail Group shareholders will own around 12% of the combined group.

The proposed deal comes after an initial offer in November was rejected.

The Home Retail Group also owns DIY chain Homebase and home retailer Habitat.

Argos has more than 35 stores in Ireland and over 690 stores in the UK.

It opened its first stores here in January 1996 in Limerick and Dublin.

In 2005, Argos launched its Irish website, which now has over 20,000 products online.

Argos is one of the largest retail employers in the country, with around 1,400 employees.

While Homebase has more than 340 large, out-of-town stores throughout Ireland and the UK.