How much is the owner of Argos and Homebase worth? Around £1bn maybe. It turns out Home Retail Group rejected an unspecified offer from Sainsbury’s late last year and when that news was announced this morning, the shares surged to value it at a cool £1bn. So £1bn it is then.

Sainsbury’s, which actually used to own Homebase, said it made an approach in November but that the proposal was rejected and it’s now considering its position. It has until February 2 if it wants to come back with another offer.

But does that actually mean another, bigger offer or even a hostile approach? Not necessarily, and Sainsbury stressed that it might not happen. However, with the prospect sending Home Retail shares up as much as 30% to 128.05p this morning, taking its value from £8.04bn to that magic £1bn figure, the market clearly expects something to happen.

The much-bigger Sainsbury’s own shares fell 5% though. Obviously, Sainsbury’s investors weren’t impressed. But the synergies are clear to the supermarket giant, which actually hosts Argos locations in 10 of its stores.

The board said it believed a combination of the two groups “is an opportunity to bring together two of the UK’s leading retail businesses, with complementary product offers, focused on delivering quality products and services at fair prices, through an integrated, multi-channel proposition.”

Sainsbury’s sold Homebase to GUS (which later morphed into Home Retail) for £969m in 2000, so £1bn in 2016 would look like a bargain price. However, Home Retail has struggled to find the growth that its investors expect. I’ll be watching this one with interest.