A race with a well negotiated final sprint. Here’s how Fnac finally managed to seize Darty, French number one appliance, despite a financial strength significantly less on paper than the other suitor, the South African Steinhoff, owner in France the furniture chain Conforama. Advised by Rothschild and Credit Agricole, Alexandre Bompard, CEO of “cultural agitator”, played his all Monday, raising its offer to 170 pence per share, or over 6% compared to the last auction of Steinhoff.
He had first taken care to ensure his back by getting “irrevocable commitments” two major shareholders of Darty, fund Knight Vinke and DNCA, bringing them a base of 22% of capital. But according to the British stock exchange law – Darty is listed in London – this promise was not binding legally only insofar Fnac managed to capture at least 50% of capital. To acquire the remaining 29%, shareholders (forty in total) have therefore been approached by phone throughout the weekend, sometimes repeatedly, in a real commando operation. The deal? 10 pence more per share in exchange for an immediate and irrevocable sale of their securities. A “ultimate escalation” has especially taken Steinhoff short Fnac undertook to pay in cash, and not only in exchange for shares, those who wanted to make him their securities . Monday night, hours after the official announcement of the new offer, Fnac claimed to have obtained commitments of 40% of capital. There were only 10% to scrounge obtained irrevocably Tuesday. . The game was played
After the success of the raid won by the underdog, the most difficult starts to the French distributor weighted with new debt – the transaction values Darty 1.16 billion against € 851 million in the initial offer. Fnac will have to prove that its doubling in size (from 3.8 billion to almost EUR 8 billion in revenues and 14 000 to over 25 000 people) is likely to make it more profitable and more able to resist the steamroller of world number 1 of online business, Amazon.
coffee
to achieve Bompard will have to meet three challenges. First, to show he can be more competitive on price. Almost half of sales at Fnac and Darty (consumer electronics, telephony, small appliances) being the same, it should be able to negotiate better margins with suppliers and thus regain ground against Amazon. Fnac has estimated these synergies to 130 million euros, including 85 million on purchases and the rest on the pooling of IT investments.
Fnac, Darty acquisition is the opportunity achieve a new dimension in home appliance market which restarts. A field she began exploring successfully in 2012 by engaging in the distribution of kitchen appliances (coffee maker, toaster …) in order to offset the structural decline of its cultural markets hit hard by the dematerialization of media in music and image. The sign directed by Alexandre Bompard proposes installing corners Fnac in Darty and vice versa.
Boulet
Second betting ahead, prove that the model of a distribution omnichannel playing on the complementarity of physical and digital networks where customers can either get the same service in the digital and physical worlds is and will remain relevant. In other words, will the store purchases resist? If the sale of cultural property is rolled by the dematerialization of media (the book resists but CDs and DVDs are plummeting), household appliances and white goods (washing machines, refrigerators …), which are the specialty of Darty , continue to sell quite well in stores. The proof is Darty returned to profit last year and appliance restarts. But if the trend of dematerialization would win all the product lines, the network of hundreds of stores (263 for Darty and 116 for Fnac) could become a drag
bet. Pass the bar the competition authorities. Marriage could be problematic in large cities like Paris or Lyon where two signs are sometimes distant only a few hundreds or tens of meters (see cons below). To avoid distortion of competition, Fnac could then be forced to give a few stores, mostly in the city center.
No comments:
Post a Comment