Home Retail shares recoup as gardening bid talk grows

For Home Retail Group, bid talk has trumped Black Friday blues.

The Argos owner’s shares ebbed further on Cyber Monday, after a lacklustre showing on Friday’s sales.

They were also hampered by reports—which Home Retail denied—that its website barely coped with the much bigger than expected online shop seen over the weekend.

Either way, it hasn’t been a great sign for a firm pinning hopes for the catalogue business to pivot online strongly enough to challenge Amazon.

Late on Monday though, the press came back for another bite of a recent story about private equity-backed interest.

The FTSE 250-listed shares rose almost 9% on Tuesday, reacting to an FT report that said a former garden centre exec was looking into a possible approach.

To be clear, naturally Nicholas Marshall’s interest was held to be in Home Retail’s DIY store (and gardening outlet) Homebase, not Argos.

However, Home Retail’s profit warning in October was pretty much down to disappointing Argos performance rather than let-downs at Homebase stores.

And as we stated earlier this month, even if current speculation turns into something more concrete, the dream won’t come true before Christmas.

Were it not for persistent suggestions of private equity interest, HOME’s fall year-to-date would look even worse than it currently does, down 50%.

The reasons for that are above.

Froth aside, HOME’s charts concur.

The shares traded above their 21-day moving average (107p) on Tuesday, a moderately bullish signifier over the medium term, backed by support derived from recent highs.

However, a falling line in place since November 2014 turned into resistance during HOME’s October sell-off and on balance, speculative buying may not have enough traction yet to overcome it.

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