Argos owner faces wait for regulator's view on Sainsbury's takeover

* Home Retail (Other OTC: HMRLF - news) agreed 1.4 bln stg Sainsbury (Amsterdam: SJ6.AS - news) 's takeover in March

* Says does not expect regulator feedback until August

* Home Retail's 2015-16 profit falls 28 pct (Recasts with comments on competition regulator)

By James Davey

LONDON, April 27 (Reuters) - Argos-owner Home Retail , which agreed last month to be taken over by British supermarket Sainsbury's, said on Wednesday it did not expect to hear what the competition regulator thinks of the deal until August.

The home and general merchandise retailer's board recommended a 1.4 billion pound ($2.04 bln) cash and shares bid from Sainsbury's last month. The deal is expected to complete in the third quarter of this year, assuming there is no major intervention from the Competition & Markets Authority (CMA).

Some analysts fear the deal could yet be delayed by a long wait for regulatory approval.

"The likely timetable for us for having any feedback, at the very earliest it's going to be some time in the summer ... probably August would be our best guess," Home Retail's Finance Director Richard Ashton told reporters.

"We would think that we wouldn't have issues over time but it's too early to tell," Chief Executive John Walden added.

A spokeswoman for the CMA said Home Retail and Sainsbury's were currently in an informal pre-notification phase with the parties voluntarily providing information.

After that process concludes the regulator will launch a formal "Phase 1" up to 40 working days inquiry, after which it can either clear the deal, seek remedies or move to a "Phase 2" 24-week investigation.

Sainsbury's wants Argos to accelerate its growth by creating Britain's largest general merchandise retail business and by expanding its online presence.

On Wednesday Home Retail reported a 28 percent fall in annual profit, reflecting tough markets and increased investment.

It (Other OTC: ITGL - news) made an underlying pretax profit of 94.7 million pounds for the year to Feb. 27, down from the 132.1 million pounds made in 2014-15. However, it beat analysts' average forecast of 93 million pounds.

Sainsbury's would have been well aware of market expectations for Home Retail's profit.

Group sales fell 1 percent to 5.67 billion pounds. They were flat at Argos and down 3 percent at home improvement retailer Homebase.

Shares (Berlin: DI6.BE - news) in Home Retail, up 71 percent so far this year, were down 0.6 percent at 169.3 pence at 0939 GMT.

In February Home Retail sold Homebase to Australian group Wesfarmers (Other OTC: WFAFF - news) for 340 million pounds. Wesfarmers intends to rebrand the chain as Bunnings and invest 500 million pounds refurbishing its 265 stores.

Home Retail said recommendation of Sainsbury's offer resulted in an exceptional goodwill impairment charge of 852 million pounds, leading to a total loss after tax for the 2015-16 year of 808 million pounds.

The goodwill, which has remained unchanged for decades, had to be aligned to the value of Sainsbury's offer.

Walden declined to comment when asked if Home Retail/Argos' top management wanted to stay after the Sainsbury's takeover. ($1 = 0.6868 pounds) (Editing by Susan Fenton)