Darty suitor Fnac prepared to hike stake to 30% on market - sources
* Fnac could choose to match rival Conforama’s 160p
* Thrilling Thursday sees four bumps topping Weds move
Darty [LON: DRTY] suitor Fnac [EPA: FNAC] is open to buying extra target shares on the market to take its stake to just below the 30% threshold, two sources familiar with the situation said.
Fnac is in a position to match Conforama’s latest offer at 160p per share if it chooses to, one of the sources said. A Fnac spokesperson declined to comment.
The up-to-30% stake build includes the 22.11% of Darty shares irrevocably committed by Knight Vinke and DNCA to Fnac's bid, the second source said. Fnac today (21 April) bought 5.59% of Darty shares, taking its effective stake to 27.7%. This leaves room for an extra 2.29% increase.
This 5.59% was purchased at 153p/share. Announcing the purchase, Fnac said Darty shareholders willing to sell their stakes at this price should contact Peel Hunt, who had the authority to make a limited number of market purchases on its behalf.
Fnac had geared up for the bidding war, the first source said. A frantic Thursday followed on the heels of rival suitor Conforama having bumped its all-cash bid to 138p/share on Wednesday 20 April.
Thursday morning saw Fnac respond with a 145p/share cash bid, with a partial share alternative for the entire capital of Darty. Conforama trumped this with a 150p/share offer, only for Fnac to announce it had bought the 5.59% stake at 153p. Conforama then announced a 160p/share offer.
Darty shares closed at 161.5p, although several after-close trades were made in the 150p-160p range.
Fnac’s move to include a partial share alternative shows 14.34% Darty shareholder Knight Vinke continues to believe this combination will produce material synergies, it is understood. Fnac’s original offer had been all-share with a GBP 70m partial cash alternative. Knight Vinke declined to comment.
The French suitor also waived a precondition requiring merger review clearance from France’s competition authority. The authority has initiated Phase II proceedings into the Fnac/Darty tie-up.
Another change is Fnac announcing it planned to make the acquisition by way of an offer, as opposed to the original plan for a scheme of arrangement. This allowed it to announce an acceptance condition of 50%. A scheme requires approval from a majority of investors representing 75% of the value of shares at a target shareholder vote.
Conforama had earlier announced it controlled 19.7% of Darty shares after purchases from several top institutional holders at 138p/share. Conforama has undertaken to Darty to keep its offer open until midnight on 10 June. It posted its original offer document on 11 April after Darty’s board recommended a 125p/share bid. Fnac's original approach was at 101p.