Friday, March 18, 2016

Darty prefer cash to shares in Conforama Fnac – Liberation

Dramatic turn in appliances. The Darty distributor, which was to marry Fnac, said Friday it reached an agreement to be acquired by the furniture group Conforama. The two companies said they had “reached an agreement” to their rapprochement, ousting Fnac which was launched several months of difficult negotiations to get hold of the distributor of household products. The Board of Darty is ready to “unanimously recommend shareholders’ group” to accept the offer “ Conforama. It offers a firm and redemption in cash at a price of 125 pence per share Darty company listed on the London Stock Exchange. An offer supported by the parent company of Conforama, the South African group Steinhoff International, which bought in 2010 and which values ​​PPR Darty to 673 million pounds sterling (approximately EUR 864 million). Less attractive, offering Fnac, Darty had initially accepted last November, was only a slightly lower amount, to 859 million, but had the major disadvantage of being predominantly via an exchange for shares. That’s why Fnac had revised upwards in the abundant 95 million in cash to take the case.

“the cash offer represents a premium of Steinhoff from the latest offering from Fnac, a premium of 54% over the last closing price prior to the announcement of a proposed offer, and provides Darty shareholders a greater realization of probability “ says Alan Parker, Chairman of the Board of Darty, to justify its decision. Accordingly, the statement said, “administrators Darty not intend to recommend the offer Fnac, unless a more favorable offer as financially that under his execution certainty. “

Steinhoff and 6500 stores worldwide

so the ball is in the camp of the sign of cultural and technical products, which declined to comment immediately. In early March, the Steinhoff group had launched an informal offer-cons on the home appliance distributor offering to repurchase the group entirely in cash. The South African, who weighed about 20 billion euros against 1.01 billion in exchange for Fnac, has found an argument to reassure shareholders that Darty, while having accepted the offer of Fnac, found themselves completely dependent on the price performance of Fnac. If this teaches headed by Alexandre Bompard has largely recovered from its initial public offering by its former owner PPR and early diversification in small appliances and small shops, its very uncertain and changing environment remains marked by a paperless cultural products that is growing and fierce competition of “pure players” such as Amazon. Moreover, giving birth in France to a archi-dominant distributor in the market of technical products, the redemption by Darty Fnac remained subject to the hazard of the competition authorities that would have to decide on the number of stores to sell by Fnac to avoid distortion of competition, especially in large cities like Paris or Lyon.

Number 2 furniture in Europe behind Ikea, Steinhoff, which intends to create in France a heavy weight on the market for home furnishings, can boast of a size very much greater than that of Fnac in the field of home appliances. With a network of 6,500 stores around the world and generates sales of 6.2 billion euros, is one of the first vendors dishwashers, washing machines and refrigerators. A group of 90 000 people, present in total in 44 countries worldwide and although still unknown in Europe are strong ambitions: it also comes to an against-offer on Home Retail, which owns furniture stores Argos in Britain.

“White goods”

Swallowing Darty, the undisputed leader in France appliance with 3.5 billion turnover of euros, it focuses on the development of synergies for purchase with Conforama (sales of 3.2 billion), which generates 21% of its business in sales of these “white goods”. An argument could also weigh in the decision of the directors of Darty face Fnac, which remains a small player in this sector that has only recently invested in order to overcome the collapse of its traditional market and CD DVD.

For the CEO of Fnac Alexandre Bompard, who was slaving for months to convince Darty shareholders of the relevance of a marriage that was intended, according his calculations, generating 85 million of synergies, this outcome is tough. It was enough for two weeks for the Board of Darty would then turn around and be persuaded cashing immediately cash Conforama is safer than betting on the medium-term increase in Fnac action presented yet on paper the advantage of having more products in common with the brand home appliances. Almost half of sales at Fnac and Darty (consumer electronics, telephony, small appliances) are the same.

Christopher Alix


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