SAINSBURY'S DIY chain Homebase is being eyed up as a takeover target by Jim Hodkinson, the former New Look chief.

Mr Hodkinson, who left the top job at New Look in May after a dispute over his conduct at an industry party, had previously worked at Kingfisher's B&Q where he has been credited with building up the market leading business.

He is believed to be working with venture capital group Charterhouse Development Capital, and is planning on taking "a look" at Homebase.

In a statement, Charterhouse director Malcolm Offord, who is at present on holiday, said: "We can confirm we are working with Jim Hodkinson and taking a look at Homebase but can make no further comment under the terms of the confidentiality agreement we have signed."

The comments came a day after Sainsbury said it was considering selling its Homebase DIY business.

Analysts forecasted the chain of 300 shops which employs 17,000 staff, could fetch between £800m and £1bn.

A sale of the business is not the only option and Sainsbury is also mulling over an alliance or a joint venture deal and has been in talks with "a number of parties" over Homebase's options.

The announcement raised speculation over the fate of the DIY chain, which opened its first store in 1981.

Homebase with a 12 per cent market share in the UK, ranks behind leader B&Q, and is considered to be one of Sainsbury's strongest performing businesses.

Potential buyers to snap up the business have been tipped to include US group Home Depot and European company LeRoy Merlin.

In the UK it was thought Homebase could possibly do an alliance with UK rival Wickes, however, this could become complicated by the stake Focus Do It All holds in Wickes, following its failed bid for the rival earlier this year.