MergerMarket
Unions representing Darty’s [LON:DRTY] employees may prefer one suitor over another, but they lack legal firepower to stymie an acquisition of the UK-listed company, a Darty union representative and an independent sector lawyer told this news service.
The company has been the subject of a bidding war and aggressive stakebuilding over the last week. At market close Monday, Fnac [ETR:FNAC] had an 18.93% stake and a 170p/share offer on the table. Conforama, a subsidiary of South African retailer Steinhoff [ETR:SHF], owns a 20.4% stake and its highest bid to date is 160p/share.
On Friday, six Darty unions issued a joint statement opposing the potential Fnac deal, citing overlaps between the two businesses that, they claimed, could result in more than 3,000 jobs being lost. The statement said the unions preferred the proposed tie-up with Conforama.
The unions are represented on the company’s works council, the lawyer said. Under the so-called "Florange Law" of 2014, works councils could theoretically aim to delay a merger by commissioning a qualified expert to write a report on the tie-up and ask for further information.
However, despite its overwhelmingly French operations, Darty is listed in the UK and any acquisition of the company would be subject only to the UK Takeover Code and would not require a works council report, the first and a second lawyer said. Its unions could only strike in an attempt to block the deal, the first added.
The UK Takeover Code was itself amended in the wake of Kraft Foods Group’s [NASDAQ:KRFT] 2010 merger with Cadbury, and the subsequent plant closures, the second lawyer said. These changes tighten rules on strategic disclosure from offerors, he added.
Rule 24.2 of the UK Takeover Code requires that bidders spell out their plans for the company’s workforce and pension scheme, the second lawyer said, and Rule 25.9 says that the target’s worker representatives have a right to voice opinions in the company’s circular to shareholders.
These opinions must be published by the bidder if received no later than 14 days after the date on which the offer becomes wholly unconditional.
Darty declined to comment.