Supermarket retailer Sainsbury’s has until 5pm tomorrow to make a formal offer for Home Retail Group, owner of general merchandise retailer Argos.

The two companies have been talking since Sainsbury’s revealed it had made a bid for Home Retail Group back in November.

If it doesn’t table a formal offer, it must walk away for at least six months according to UK takeover rules. Home Retail Group management and shareholders are looking to achieve a price of around £1.4bn, while Sainsbury’s wants to pay closer to £1bn.

Since Sainsbury’s last offer, HRG has announced the sale of its Homebase home improvement chain to Australian retail group Wesfarmers, which plans to convert all stores to its Bunnings format.

That deal was widely believed to have paved the way for a new Sainsbury’s bid, with the big four grocer said to be interested in using Argos to take on Amazon. More than a third of Argos’ store leases are up for renewal within the next four years, with Sainsbury’s reportedly keen on incorporating Argos within its own supermarkets.