Steinhoff bids whopping $924 million for Darty

Cape Town / Bloomberg

Steinhoff International Holdings NV Group made an unsolicited, 662-million-pound ($924 million) bid for French electronics retailer Darty Plc, seeking to break up Groupe Fnac SA’s agreement to buy the company.
The South African retailer proposed to pay 125 pence a share in cash, Darty said in a statement Wednesday. The bid is 8.5 percent above Darty’s closing price yesterday. Darty agreed on November 20 to sell itself to Fnac in a stock swap that valued Darty at about 122 pence a share, or 646.1 million pounds, as of yesterday’s close, according to data compiled by Bloomberg.
The bid is part of an acquisition spree by Steinhoff, whose shareholders include South African billionaire Christo Wiese. Chief Executive Officer Markus Jooste, who has said he aims to challenge Sweden’s Ikea, is targeting Europe for expansion after moving Steinhoff’s primary share listing to Frankfurt in December. The owner of France’s Conforama furniture chain said Feb. 22 it planned to make a 1.4 billion-pound offer for Home Retail Group Plc, the owner of the Argos chain, topping a bid from U.K. supermarket operator J Sainsbury Plc. The Darty bid is “another step in Steinhoff’s seeming consolidation of European retail,” said Graham Renwick, an analyst at Exane BNP Paribas. “In acquiring Darty, Steinhoff prevents the merger of its two largest competitors, spreads its retail footprint which can be leveraged across the brands, and obtains know-how in areas such as online.”

Higher Bid
Darty jumped above the bid price, indicating traders expect a higher offer. The stock climbed 9.3 percent to 126 pence at 8:10 a.m. in London, where the company’s main stock listing is. Fnac dropped 6 percent to 57 euros in Paris, while Steinhoff lost 0.4 percent to 5.08 euros in Frankfurt. Darty said there’s no certainty Steinhoff will make a firm offer, nor on the terms.
The South African retailer said it reserves the right to bid less than 125 pence a share if it gets the agreement of Darty’s board.
Steinhoff, founded in Germany in 1964, also owns the Bensons for Beds chain in the U.K. The company, while run from Johannesburg, moved its corporate domicile from Johannesburg to Amsterdam last year. A spokesman for Fnac didn’t immediately respond to a call seeking comment. The Ivry-sur-Seine, France-based company had revenue of 3.9 billion euros in 2015 from selling electronics, books and music.
Steinhoff International is a South African-based international furniture and household goods retail chain, which operates in Europe, Africa and Australasia.
Steinhoff was founded in 1964 by Bruno Steinhoff in Westerstede, Germany and moved its headquarters to South Africa in 1998. It went public on the Johannesburg Stock Exchange.
In the UK, Steinhoff owns the high street brands Cargo, Harveys Furniture, Bensons for Beds and Sleepmaster.

In 2011, Steinhoff bought Conforama, Europe’s second largest retailer of home furnishings, with over 200 stores in France, Spain, Switzerland, Portugal, Luxembourg, Italy and Croatia.