Steinhoff bid topped as fight for Darty heats up

Geneva - Groupe Fnac raised its bid for French electronics retailer Darty to £779m ($1.1bn), topping an increased offer from Steinhoff International [JSE:SHF] as the showdown between the rival suitors heats up.

Investors would receive 145 pence a share in cash, Fnac said in a statement on Thursday. That’s 10% more than Wednesday’s closing price. They also would have the option of receiving 4 Fnac shares for every 125 Darty shares they own.

Buying Darty would more than triple Fnac’s number of stores. By combining, the retailers would get cost savings and additional sales of at least €130m ($147m) annually, Fnac said, up from the bidder’s previous estimate of €85m tied only to lower expenses. Steinhoff, meanwhile, owns the Conforama furniture chain in France and would gain another 400 outlets in France, Belgium and the Netherlands from acquiring Darty.

The increased synergies forecast by Fnac indicate that Steinhoff too may be able to book higher-than-expected cost savings from a deal, justifying a further increase in its bid, said Graham Renwick, an analyst at Exane BNP Paribas.

“This leaves some headroom for Steinhoff to come back with a higher offer, although beyond 160 pence returns start to diminish,” he wrote in a report today.

Darty jumped 13% to 149 pence at 08:10 in London, where the company is based. Fnac, which sells electronics, books and music and videos, dropped 3%t to €56.03 in Paris. Steinhoff rose 1.2% to €5.51 in Frankfurt.

Fnac’s earlier agreement to buy Darty for £673m was topped by Steinhoff, which late on Wednesday raised its offer to 138 pence a share. Investment managers have sold Steinhoff about 19.5% of Darty’s shares at that price, the company said in a statement.

Fnac, which is based in Ivry sur Seine, France, said shareholders with 22% of Darty’s stock have agreed to accept its share swap.

Vivendi said this month it’s buying 15% of Fnac in an alliance to cooperate in distribution, live events and digital services.

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