The company, which retains its larger Argos business, said last week it was in advanced talks to sell the chain to the Australian company for 340 million pounds.

Wesfarmers said on Monday it would spend another A$500 million (242 million pounds) refurbishing the 265 stores.

Home Retail rejected a separate approach from Sainsbury's for the whole group in November. The supermarket chain, which was mainly interested in Argos, has until Feb. 2 to make a formal bid.

(Reporting by Paul Sandle; editing by Kate Holton)

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