Darty shares jump as Fnac ups offer, trumps Conforama

21st Apr 2016 08:12

(ShareCast News) - Shares in Darty surged on Thursday as Fnac upped its offer for the French electronics retailer to 145p per share, beating the offer from Steinhoff subsidiary Conforama.Fnac said on Thursday that the new offer values Darty at £779m. The increased offer represents a premium of 79% to the closing price of 81p on 29 September 2015, which was the last business day before Fnac announced its possible offer.The new offer will also include a partial share alternative.Fnac said the proposed acquisition will result in "compelling financial benefits" to the combined group, including total annual pre-tax synergies of at least €130m per annum.This amount does not take into account the impact of any remedies that may be imposed by the French Competition Authority.On Wednesday, Conforama's parent company - South Africa's Steinhoff International Holdings - bought a 19.5% stake in Darty at 138p per share and said it would extend the same cash offer to buy the remaining shares in the retailer.Steinhoff said the cash consideration payable under the terms of the increased offer, which values Darty at around £742m, will be funded using acquisition facilities provided by Citibank and HSBC.Darty said in a statement that it will now "carefully consider" both offers and provide further advice to its shareholders in due course.Atif Latif, director of trading at Guardian Stockbrokers, said: "Conforama increasing its offer shows there is still plenty of cost saving and equity value in Darty that can be extracted and the higher price makes the deal more attractive to equity holders."With the Vivendi /Fnac strategic partnership announced earlier this month, we now see this higher offer as a sound fit into Fnac. The synergy cost saving analysis even at the higher price makes this deal very credible but the 145p does still undervalue Darty and we would not be surprised for a higher offer to materialise."At 0950 BST, Darty shares were up 13% to 149.03p.