Steinhoff bids R14.5bn for Darty, disrupting plan

Geneva - Steinhoff International [JSE:SHF] made an unsolicited, £662m bid for French electronics retailer Darty, 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 on Wednesday. The bid is 8.5% above Darty’s closing price on Monday. Darty agreed on November 20 to sell itself to Fnac in a stock swap that valued Darty at about 122 pence a share, or £646.1m, as of Monday’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 on February 22 it planned to make a £1.4bn offer for Home Retail Group, the owner of the Argos chain, topping a bid from UK supermarket operator J Sainsbury.

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% to 126p at 10:10in London, where the company’s main stock listing is. Fnac dropped 6% to €57 in Paris, while Steinhoff lost 0.4% to €5.08 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 125p/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 UK. The company, while run from Johannesburg, moved its corporate domicile from Johannesburg to Amsterdam last year.

A spokesperson for Fnac didn’t immediately respond to a call seeking comment. The Ivry-sur-Seine, France-based company had revenue of €3.9bn in 2015 from selling electronics, books and music.