SUPERMARKET giant Sainsbury plans to agree the sale of its Homebase DIY chain before Christmas.

But Sainsbury chief executive Sir Peter Davis admitted that reaching an agreement to sell the chain had taken longer than anticipated.

He refused to be drawn on who the potential buyer was, or what price tag Sainsbury's had attached to the group.

Sainsbury's first said in August that it was considering selling the DIY divisionl.

It has been estimated the business could fetch more than £1bn.

Sir Peter confirmed that the group was in "advanced negotiations" relating to the sale of the business.

He added: "It would be fair to say I would be disappointed if there was no announcement before Christmas."

But he cautioned that he had been "less successful on the forecasting the time of the sale than anything else".

Potential buyers are believed to include US group Home Depot, European company LeRoy Merlin and former New Look chief Jim Hodkinson working with venture capital group Charterhouse Development Capital.

The announcement came as the supermarket chain announced half-year results, with pre-tax profits in the 28 weeks to October 14 rising to £338m, against £336m.

But, underlying pre-tax profits, taking into account depreciation and one-off costs, dipped to £300m, against £361m.

In the UK, where Sainsbury's has been struggling to turn around the business, operating profit in the supermarkets' division slipped 23 per cent to £255.5m. But in Homebase, operating profits were up 7.3 per cent to £39.8m, before e-commerce costs of £6.3m.

Sir Peter unveiled plans to expand the group's store refurbishment programme, with 150 stores earmarked for an upgrade next year.