Fnac Lifts Darty Bid to $1.1 Billion, Heating Up Retail Fightby
Investors would receive 145 pence in cash or share alternative
Exane analyst says Steinhoff could raise bid to 160 pence
Groupe Fnac SA raised its bid for Darty Plc to 779 million pounds ($1.1 billion), intensifying a takeover battle in which it is vying with Steinhoff International Holdings NV for a lead role in consolidating French electronics retailing.
Fnac, which sells consumer electronics, books, videos and music, said in a statement Thursday that investors would receive 145 pence a share in cash. That’s 10 percent more than Wednesday’s closing price. They also would have the option of receiving 4 Fnac shares for every 125 Darty shares they own.
Fnac raised its offer a day after French furniture and appliance chain Conforama, a unit of Amsterdam-based Steinhoff, lifted its bid for Darty to 138 pence a share. Both suitors are seeking synergies in a market under pressure from online retailers.
Buying Darty, which sells appliances and electronics, would triple Fnac’s number of stores to about 600. By combining, the retailers would get cost savings and additional sales of at least 130 million euros ($147 million) annually, Fnac said. Previously, Fnac estimated 85 million euros in cost savings alone, without a forecast for additional sales.
Steinhoff would gain another 400 outlets in France, Belgium and the Netherlands from acquiring Darty.
The increased synergies forecast by Fnac indicate that Steinhoff, too, may be able to book higher-than-expected cost savings from a deal, justifying a further increase in its bid, said Graham Renwick, an analyst at Exane BNP Paribas.
“This leaves some headroom for Steinhoff to come back with a higher offer, although beyond 160 pence returns start to diminish,” he wrote in a report.
Darty jumped 13.5 percent to 149.25 pence at 11:09 a.m. in London, where the company is based. Steinhoff rose 0.6 percent to 5.47 euros in Frankfurt. Fnac fell 0.6 percent to 57.44 euros in Paris.
Darty said in a statement that it would consider the two offers and advise shareholders later.
Steinhoff said investment managers have sold it about 19.5 percent of Darty’s shares.
Fnac, which is based in Ivry-sur-Seine, France, said shareholders with 22 percent of Darty’s stock have agreed to accept its share swap.
French media and telecommunications company Vivendi SA said this month it’s buying 15 percent of Fnac in an alliance to cooperate in distribution, live events and digital services.