18th Mar 2016 15:45
LONDON (Alliance News) - Steinhoff International Holdings NV has decided not to make a firm offer for Argos-owner Home Retail Group PLC, opting to strike a deal with European electrical retail group Darty PLC instead.
Darty had previously recommended a takeover offer made for the company by Groupe Fnac SA that was made last November, but said Friday it is withdrawing its recommendation in favour for the new offer made by Steinhoff.
Steinhoff has made an offer of 125.0 pence per Darty share, valuing the company at GBP673.0 million.
Darty has favoured Steinhoff's offer as it is an 18.6% premium to the previously recommended implied offer price of 105.4 pence per Darty share from Groupe Fnac.
Darty shares were trading down 0.4% to 130.25 pence per share on Friday afternoon.
Darty said the board unanimously recommends the offer, and all the directors plan to vote in favour of the Steinhoff deal using their own voting rights - unless Group Fnac "announced a higher and deliverable offer."
"As a consequence of this announcement, the Darty directors no longer intend to recommend the Fnac offer and, in the absence of a higher and deliverable offer from Fnac, Darty will not be proceeding with the proposed scheme of arrangement under that offer," the company said.
Steinhoff has made the offer through its wholly-owned subsidiary, Conforama, which has secured acceptances for the offer from shareholders with a combined 14.14% stake in Darty.
As a result of the agreement with Darty, Steinhoff has ruled itself out of the race to acquire Home Retail Group PLC, the owner of Argos, potentially leaving J Sainsbury PLC to pick up the company.
Steinhoff and Sainsbury both had until the end of play Friday to make a firm offer for Home Retail Group or they will have to walk away.
"Steinhoff now confirms that it does not intend to make an offer for Home Retail Group," said Steinhoff, the owner of Benson for Beds and Harveys.
Sainsbury's are expected to publish a statement imminently to unveil whether or not it will make a firm offer for Home Retail Group. Although Sainsburys no longer faces any competition for the company, doubts will still remain as Sainsbury Chief Executive Mike Coupe said this week that the supermarket chain "doesn't need" Argos in order to be successful, stating it is not a "must-do" deal.
Sainsbury's made a cash and shares offer for Home Retail in February valuing the company at 161.3 pence per share, which was then disrupted by Steinhoff's all-cash bid valuing Home Retail at around 175.0p, much higher than the Sainsbury's offer.
Home Retail shares were trading down 10% to 162.70 pence per share on Friday afternoon whilst Sainsbury shares were down 1.6% to 277.00 pence per share.
By Joshua Warner; [email protected]; @JoshAlliance
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Related Shares:
Sainsbury'sHome ReitDRTY.L