It’s good news that will not last long. Thursday, March 17, in the evening, Fnac announced having received a positive opinion of the Authority of the Belgian competition as part of its project to buy Darty. “The Belgian Competition Authority has approved unconditionally the rapprochement between Fnac and Vanden Borre (note: which belongs to the Darty group) without imposing any commitment, considering that it does not violate competition in Belgium , thus satisfying the first preconditions of reconciliation, “then praised the cultural distributor, now subject to the opinion of the competition Authority in France.
Less than 24 hours later, the ad is overshadowed by a joint statement of Darty and Conforama: both signs there show that their boards have reached an agreement on the takeover offer by Conforama Darty on March 2. The announcement is published two weeks after the publication of this offer, while at the time of the offer on Darty Fnac, the agreement of the boards was published on 20 November, almost two months exactly after the public announcement of the offer on 30 September. How to explain the speed with which the boards have agreed? The reason lies in the three arguments that shock Conforama has.
3 arguments for Conforama
First of all, the offer is more attractive. It stood at 125 pence per share Darty, exceeding that of the Fnac in recent months. “The offer represents a premium of approximately 3.4% over the implied present value of 120.9 pence per share Darty resulting from the offer of Fnac Group SA” announces Darty in a statement. What to reassure shareholders, but that’s not all: the acquisition would be entirely in cash, while Fnac, she only offered a portion in cash, representing a maximum 67 million pounds, or 12% price over 19 November. Conforama therefore raises an uncertainty because the amount of the check does not depend on the evolution of the share price.
Next, the competitive situation is simpler. The catchment areas of Darty, urban, are more complementary to those of Conforama, rural rather than to those of Fnac. The most typical example is the Italie 2 shopping center, in the 13th arrondissement of Paris, home to both a Darty and Fnac. Consequences? The decision of the Competition Authority, which is still waiting for Fnac, Darty project should fall faster. Above all, it should involve less disposals in consideration of the operation stores.
A more reassuring marriage
Finally, the project is more reassuring. According to our information, the contact between Conforama and Darty went better, revealing themselves warm. The potential redeemer, Conforama, gave clear guarantees on preserving jobs, and keeping up with the current management team. Fnac, on this point would have been less transparent. The latter was also in the publication of its offer late 2015 highlighted the possible synergies of 85 million euros in total, of which 40 million would be due to the restructuring of the seat. At stake: potentially hundreds of jobs lost. In addition, observers emphasize the greater proximity of corporate cultures between Darty and Conforama. A final element reinsurance for Darty: the support of the parent Steinhoff behind Conforama, accustomed of acquisitions, while Fnac is less experienced on the subject
What about the Fnac.?
When contacted by Challenges, Fnac replied that “this announcement is confirmation of what was already public for several days,” adding: “Fnac is evaluating the various options available to it. ” The situation is well under way for the cultural distributor, but the door does not lie entirely closed. The press Darty stipulates that “administrators Darty not intend to recommend the offer and Fnac, unless a more favorable offer as financially that under his certainty execution “Darty will not proceed with this offer. It remains to be if a better offer will actually be made by Fnac. According to the JDD , Fnac is studying several options. Rapprochement with another distributor, with an investment fund or seeking the support of banks