Fnac free to land Darty as Conforama throws in towel
French furniture chain Conforama said Wednesday it was throwing in the towel in its battle to control leading electrical goods chain Darty, leaving the way clear for compatriot Fnac.
France-based books and electronics retailer Fnac on Monday had made a third bid for control of London-listed Darty to see off intense competition from Conforama, owned by acquisitive South African retailer Steinhoff, for London-listed Darty and said it was lifting its latest bid to 170 pence ($2.5, 2.2 euros) per share.
Conforama confirmed it would not be matching that.
"Conforama's board confirms that its third offer of 160 pence per Darty share is definitive and will not be increased," the group said in a statement, with general director Alexander Nodale indicating that they "had in mind a clear value for Darty" equating to 1.09 billion euros it would not go beyond.
That offer "reflects value criteria which we use for all acquisitions" and "we continue to think that at this price Darty would have represented a good fit for the Steinhoff group," Nodale said.
"But at a higher price that would no longer create sufficient sufficient shareholder value," Nodale said.
Fnac, which did not comment on Conforama's withdrawal, and Conforama had been going toe to toe since September for Darty.
Fnac's knockout bid values Darty, a French market leader on white goods with some 400 outlets but not well known internationally, at 1.16 billion euros.
Late Tuesday, Fnac said it had received the backing of a majority of Darty shareholders for its bid, and had lifted its own capital stake to 29.73 percent. It added that two key Darty shareholders, Knight Vinke and DNCA investments had pledged their own stakes worth a combined 22.1 percent in support, giving the Fnac bid 51.84 percent.
Fnac said it would in the coming weeks be officially placing its bid with UK stock exchange authorities, having indicated Monday that its financial advisors Rothschild "consider its available resources sufficient to carry out the totality" of the proposed deal.
The chain recently obtained a 950 million euro line of bank financing and can also count on the support of the Vivendi group, which took a 15 percent stake in Fnac worth 159 million euros.
Last Thursday had seen a volley of five bids and counter bids, pushing Darty's share price up by almost a quarter as its suitors jostled for advantage in the battle to retain market share in a tough but rising sector inhabited by the likes of US behemoth Amazon and CDiscount of France.
In early trading Wednesday, Darty shares were off 0.3 percent at 168.25 pence in London -- compared with 131.5 pence at Wednesday's close -- while Fnac was up 1.2 percent at 54.91 euros in Paris and Steinhoff was up 1.0 percent at 5.4 euros in Frankfurt.
© 2016 AFP