Conforama increases cash offer for Darty to 138p per share
Conforama, the Saint-Priest, France-based home furnishings retail chain that is a wholly owned subsidiary of Steinhoff International Holdings [JSE:SNH], has announced an increased cash offer for Darty [LSE:DRTY], the London, England-based multi-channel electrical retailer.
This recent development comes on the heels of speculation that Fnac [EPA:FNAC], the French music, book and electronics giant, is not keen on taking part in a protracted bidding war with Conforama for Darty.
Darty had a workforce of around 12,618 as of 4Q15, according to information on Google Finance.
Press release
Highlights
· Conforama announces the acquisition of in aggregate 103,205,977 Darty Shares from Majedie Asset Management Limited, Schroder Investment Management Limited, Standard Life Investments (Holdings) Limited and UBS Asset Management representing approximately 19.5% of the existing issued ordinary share capital of Darty, at 138p per Darty Share.
· Conforama and its associates have now acquired or received irrevocable undertakings in respect of 104,214,138 Darty Shares representing, in aggregate, approximately 19.7% of the existing issued ordinary share capital of Darty.
· Accordingly, Conforama announces an increased cash offer to acquire the entire issued and to be issued ordinary share capital of Darty not already held by Conforama at 138p per Darty Share.
1 Introduction
On 18 March 2016 the boards of Conforama Investissement SNC and Darty announced that they had reached agreement on the terms of a recommended all cash offer to be made by Conforama Investissement SNC (with the support of its ultimate parent company, Steinhoff International Holdings N.V. ("Steinhoff")), or a direct or indirect wholly owned subsidiary of Steinhoff, for the entire issued and to be issued ordinary share capital of Darty (the "Original Offer"). On 11 April 2016 Conforama published an offer document setting out the full terms and conditions of the Original Offer (the "Original Offer Document").
The board of Conforama announces that Steinhoff Finance Holdings Gmbh ("SFH"), a wholly owned subsidiary of Steinhoff International Holdings N.V. ("Steinhoff"), has today acquired in aggregate 103,205,977 Darty Shares from Majedie Asset Management Limited, Schroder Investment Management Limited, Standard Life Investments (Holdings) Limited and UBS Asset Management (the "SFH Acquisition"), representing approximately 19.5% of the existing issued ordinary share capital of Darty on 19 April 2016 (being the latest practicable Business Day prior to this announcement) at a price of 138p per Darty Share (the "Increased Offer Price").
2 Increased Offer
Following the acquisition by SFH of Darty Shares at the Increased Offer Price, the board of Conforama is pleased to announce the terms of an increased cash offer to be made by Conforama (with the support of Steinhoff) for the entire issued and to be issued ordinary share capital of Darty (the "Increased Offer").
Under the terms of the Increased Offer, Darty Shareholders will be entitled to receive:
for each Darty Share 138p in cash
The Increased Offer represents a premium of approximately:
o 70% to the Closing Price per Darty Share of 81.0p on 29 September 2015 (being the last Business Day prior to the start of the Offer Period)[1];
o 13% to the current implied offer price of 122.1p on 19 April 2016 (being the last Business Day prior to the date of this announcement) per Darty Share from Groupe Fnac S.A. ("Fnac") which was announced on 20 November 2015 (the "Fnac Offer");
o 31% to the previously recommended implied offer price of 105.4p per Darty Share from Fnac on 20 November 2015;
o 19% to the previously recommended implied offer price of 116.2p per Darty Share from Fnac on 6 November 2015; and
o 4.5% to the Closing Price per Darty Share of 132p on 19 April 2016 (being the last Business Day prior to the date of this announcement).
The Increased Offer values the entire issued, and to be issued, share capital of Darty at approximately £742 million.
Pursuant to the terms of the Original Offer Document, Darty Shareholders who have previously validly accepted the Original Offer will automatically be deemed to have accepted the terms of the Increased Offer by virtue of their prior acceptances and therefore need take no further action. Save as set out in this announcement, the Increased Offer is subject to the same terms and conditions as the Original Offer. The Increased Offer is a revision to the Original Offer and shall be construed accordingly.
In accordance with Rule 32.1 of the Code, a revised offer document (the "Increased Offer Document") containing details of the Increased Offer will be posted to Darty Shareholders and, for information only, to participants in the Darty Share Incentive Schemes and persons with information rights including employees or their representatives (other than in relation to anyone in any jurisdiction where extension or acceptance of the Increased Offer would violate the law of that jurisdiction, including but not limited to Canada, Australia, Republic of South Africa and Japan (a "Restricted Jurisdiction")) in due course.
The board of Darty recommended Conforama's Original Offer of 125p per Darty Share. The board of Conforama will seek the Darty board's recommendation of the Increased Offer in due course.
3 Financing of the Increased Offer
The cash consideration payable under the terms of the Increased Offer will be funded using acquisition facilities provided by Citibank, N.A., London Branch and HSBC Bank plc.
Each of Citigroup Global Markets Limited and HSBC Bank plc, joint financial advisers to Steinhoff, is satisfied that sufficient cash resources are available to Conforama to satisfy in full the cash consideration payable to Darty Shareholders under the terms of the Increased Offer.
4 Darty Share Plan
Participants in the Darty Share Plan will be contacted to explain the effect of the Increased Offer on the proposals which will be made in respect of their options and awards.
5 Disclosure of interests in relevant securities
Conforama Investissement SNC has made a public Opening Position Disclosure setting out the details required to be disclosed by it under Rule 8.1(a) of the Code on 16 March 2016. The Opening Position Disclosure and the Original Offer Document included relevant details in respect of persons acting in concert with Conforama.
Conforama confirms that it will procure that its concert party, SFH, will make a dealing disclosure in respect of the SFH Acquisition, setting out the details required to be disclosed under Rule 8.4 of the Code, by no later than 12:00pm (London time) on 21 April 2016 (being the Business Day following the date of dealing).
As of the close of business on 19 April 2016 (being the last Business Day prior to the publication of this announcement), the following Conforama concert parties hold the following interests:
· Citigroup Global Markets Limited indirectly holds a short position in respect of 54 Darty Shares representing 0.000009% of the issued ordinary share capital of Darty;
· Investec Bank plc indirectly holds 3,050 Darty Shares representing 0.0005% of the issued ordinary share capital of Darty; and
· LGIM Dynamic Diversified Fund holds 5,150 Darty Shares representing 0.0008% of the issued ordinary share capital of Darty.
Save as set out in the Opening Position Disclosure, the Original Offer Document and in this paragraph, none of Conforama nor, so far as Conforama is aware, any person acting in concert (within the meaning of the Code) with Conforama (including the Conforama Directors) has:
· any interest in, or right to subscribe for, any Darty Shares or other relevant securities relating to Darty, nor does any such person have any short position in Darty Shares or other relevant securities relating to Darty, including any short position under a derivative, any agreement to sell, any delivery obligation or right to require another person to purchase or take delivery of Darty Shares or other relevant securities relating to Darty; or
· borrowed or lent any Darty Shares or other relevant securities relating to Darty, nor entered into any financial collateral arrangements relating to Darty Shares or other relevant securities relating to Darty.
6 Acceptance, irrevocable undertakings and letter of intent
As at 5.00 p.m. (London time) on 19 April 2016 (being the last Business Day prior to the date of this announcement), Conforama had received no valid acceptances of the Original Offer.
Conforama has received irrevocable undertakings from each of the Darty Directors to accept the Increased Offer in respect of their entire beneficial holdings of, in aggregate, 1,008,161 Darty Shares, representing, in aggregate, approximately 0.19% of Darty's existing issued share capital. These irrevocable undertakings will cease to be binding if, amongst other things, a competing offer is received from a third party which Lazard determines to be an improvement to the terms of the Increased Offer or the Increased Offer lapses or is withdrawn.
As at the date of this announcement Conforama Investissement SNC has received a letter of intent from Schroder Investment Management Limited, to accept the Original Offer in respect of 74,883,606 Darty Shares, representing, in aggregate approximately 14.14% of the existing issued share capital of Darty. SFH has today acquired 38,000,000 Darty Shares from Schroder Investment Management Limited.
7 Closing Date of the Increased Offer
Conforama has undertaken to Darty, as set out in paragraph 1(a) of Part B (Further Terms of the Offer) of Appendix I of the Original Offer Document, that while the Increased Offer has not been declared or becomes unconditional as to acceptances and remains recommended by the Darty Directors it will extend the Increased Offer so that it remains open for acceptances until midnight on 10 June 2016 ("Day 60").
Notwithstanding the above Conforama urges Darty Shareholders to accept the Increased Offer by 1.00 p.m. (London time) on the next closing date of the Increased Offer, which will be 14 days following the date on which the Increased Offer Document is published (or such later date as Conforama may determine).
Any extensions of the Increased Offer will be publicly announced to an RIS no later than 8.00 a.m. (London time) on the Business Day following the date on which the Increased Offer was otherwise due to expire, or such later date or time as the Panel may agree.
8 Compulsory Acquisition, Delisting and re-registration
If Conforama receives acceptances under the Increased Offer in respect of, and/or otherwise acquires, both 90% or more in value of the Darty Shares to which the Increased Offer relates and 90% or more of the voting rights carried by those shares, and assuming that all of the other conditions of the Increased Offer have been satisfied or waived (if capable of being waived), Conforama intends to exercise its rights in accordance with sections 974 to 991 of the Companies Act 2006 to acquire compulsorily the remaining Darty Shares on the same terms as the Increased Offer.
Following the Increased Offer becoming or being declared unconditional in all respects, if Conforama receives acceptances under the Increased Offer in respect of, and/or otherwise acquires 75% or more of the voting rights carried by the Darty Shares, and subject to any applicable requirements of the UK Listing Authority, it is intended that Conforama will procure that Darty makes applications to cancel the listing of Darty Shares on the UKLA's Official List and on the Eurolist by Euronext, and to cancel trading in Darty Shares on the London Stock Exchange's Main Market for listed securities and on Euronext Paris.
It is also proposed that on or following the Increased Offer becoming or being declared unconditional in all respects, Darty will be re-registered as a private limited company.
9 Offer-related arrangements
A summary offer related arrangements is set out in paragraph 14 of Part II of the Original Offer Document.
10 Dividends
If Darty announces, declares or pays any dividend or any other distribution to Darty Shareholders after 11 April 2016, Conforama reserves the right to make an equivalent reduction to the Increased Offer Price.
11 General
A list of documents which are available, subject to certain restrictions relating to persons resident in any Restricted Jurisdiction, on the Steinhoff and Darty websites (
http://www.steinhoffinternational.com/ and
http://www.dartygroup.com) is set out in paragraph 12 of Appendix II of the Original Offer Document. A copy of this announcement will also be made available, free of charge subject to certain restrictions relating to persons resident in Restricted Jurisdictions, at
http://www.steinhoffinternational.com by no later than 12 noon (London time) on the Business Day following the date of this announcement.
Save as set out in this announcement, the Increased Offer will be subject to the same terms and conditions as the Original Offer set out in the Original Offer Document. Accordingly, your attention is drawn to the Original Offer Document, which is available on Steinhoff's website at
http://www.steinhoffinternational.com.
Subject to the requirements of the Takeover Panel, Conforama reserves the right in its sole discretion to waive (if capable of waiver) in whole or in part any of the conditions in paragraphs (b) to (p) in Part A of Appendix I of the Original Offer Document.
Your attention is drawn to Appendix I which form part of, and should be read in conjunction with, this announcement and contains the bases and sources of certain information used in this announcement.
Terms and expressions used in this announcement shall, unless otherwise defined herein and save as the context otherwise requires, have the same meanings as given to them in the Original Offer Document.