• Grocer said unwilling to pay more than 150 pence a share
  • Argos owner Home Retail said to want at least 170 pence

J Sainsbury Plc’s plan to acquire Home Retail Group Plc is in limbo as the U.K. retailers struggle to reach an agreement over price, according to four people familiar with the matter.

Sainsbury is unwilling to pay more than 150 pence a share, which would value Home Retail at about 1.2 billion pounds ($1.7 billion), said one of the people, who declined to be identified as talks have yet to be concluded. Home Retail won’t sell for less than 170 pence, that person said.

Sainsbury has until Feb. 2 to make a formal bid for the Argos owner under U.K. takeover rules and is unlikely to seek an extension to that, another person said. The deal may fall apart this weekend, two of the people said, though no final decision has been made and an offer is still possible.

Representatives for both companies declined to comment.

Home Retail shares fell as much as 12 percent to 125 pence in London after the Financial Times reported that talks had stalled. Sainsbury stock rose as much as 3.9 percent.

Home Retail would be Sainsbury’s biggest acquisition, giving it more than 800 Argos stores and a vastly expanded product delivery network. The grocer is seeking to fight back in a market beset by discount competition where efficient distribution has become crucial in winning the increasing number of shoppers that want to order online.

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