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Steinhoff Said to Be Close to Buying PPR’s Conforama

Dec. 8 (Bloomberg) -- Steinhoff International Holdings Ltd., Africa’s largest furniture maker, is close to buying PPR SA’s Conforama chain after offering more than 1.5 billion euros ($1.98 billion) for the unit, according to two people with knowledge of the matter.

A decision may come as soon as today, said the people, who declined to be identified because the talks are private. Colony Capital LLC and Goldman Sachs Group Inc.’s GS Capital Partners also made a joint bid of more than 1.5 billion euros for France’s second-largest furniture retailer, the people said. An offer was also submitted yesterday by private-equity firm Carlyle Group, said a person with knowledge of the matter.

“It’s no more or less than what we expected,” said Simon Irwin, an analyst at Liberum Capital Ltd. in London, referring to the sale by PPR. “The market is much more interested in terms of what they do with the funds.” He has a “hold” recommendation on PPR shares.

PPR is selling Marne-La-Vallée, France-based Conforama to focus on its Gucci Group luxury-goods unit and Puma AG sporting-goods division. The Paris-based company also plans to sell the Fnac music chain and mail-order retailer Redcats. For Steinhoff, the acquisition would add 241 stores to the Johannesburg-based company’s 951 retail outlets in Europe.

PPR spokeswoman Charlotte Judet declined to comment. No one at Steinhoff could immediately be reached for comment.

Conforama ranks behind Ikea in France and also has stores in Switzerland, Luxembourg, Spain, Portugal, Italy and Croatia. The furniture retailer’s earnings before interest, taxes, depreciation and amortization increased 32 percent to 83 million euros in the first six months of 2010 as sales rose 6.2 percent. Third-quarter sales gained 9.8 percent.

Vertical Integration

“Furniture retailing is still not a business that hugely excites, but obviously Steinhoff think they can bring something to it through vertical integration,” said Irwin, who doesn’t cover the African company.

Steinhoff operates more than 50 factories in countries such as Poland, the Netherlands, Australia and South Africa, and has more than 1,100 retail outlets. It employs about 41,000 people.

PPR may acquire more brands to bolster its luxury and lifestyle divisions after selling one or two of the retail businesses, CEO Francois-Henri Pinault said Oct. 18.

PPR shares fell 55 cents, or 0.4 percent, to 126.90 euros in Paris trading today. Steinhoff shares climbed 60 cents, or 2.7 percent, to 22.60 rand in Johannesburg.

To contact the reporter on this story: Andrew Roberts in Paris at

To contact the editor responsible for this story: Celeste Perri at

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