LONDON (Reuters) - British supermarket group Sainsbury's (>> J Sainsbury plc) said on Friday its 1.4 billion pounds ($2 billion) offer for Argos-owner Home Retail Group (>> Home Retail Group Plc) had been recommended by the board of the catalogue retailer.

Sainsbury's, Britain's second biggest grocer, was left a clear run to buy Argos, which sells electricals, jewellery and other general goods, when rival suitor South Africa's Steinhoff International withdrew last month.

Home Retail shareholders will receive 0.321 new Sainsbury's shares and 55 pence in cash for each share, plus an additional cash payment of 27.8 pence from the earlier disposal of the group's other chain, Homebase, and in lieu of a final dividend, Sainsbury's said.

(Reporting by Paul Sandle; editing by Kate Holton)

Stocks treated in this article : J Sainsbury plc, Home Retail Group Plc