Rapid-fire bids as French retail takeover war heats up

Bids flew like bullets Thursday as an acquisitive South African retailer and a French electronics giant battled it out over control of one of Europe's leading electrical goods chains.

The fight for control of London-listed Darty, which runs 400 stores across Europe, pits Conforama, owned by South African retail giant Steinhoff, against France-based Fnac, a seller of books, music and electronic goods with a growing international network.

Fnac, seeking international expansion, opened a new round of hostilities Thursday by launching a fresh bid for Darty, valuing it at £779 million ($1.1 billion, 990 million euros).

Only hours later, Steinhoff's Conforama lifted its own previous bid to £806 million.

Within minutes, Fnac raised its bid again, to around £820 million, only to be quickly trumped again by Conforama, which is now offering £860 million.

This takes the number of fresh bids to three by Conforama and two by Fnac in just 24 hours, after Conforama increased an earlier offer by 10 percent on Wednesday.

Darty shareholders, seeing the market value of their company grow by the hour, were Thursday's big winners, their shares leaping by 23 percent to £161.75 by the late European afternoon.

The latest bid values Darty at over £300 million more than when the takeover battle began a month ago.

Darty's board said it would review the new offers and "provide further advice to Darty shareholders in due course".

- Decision to make -

Early on in the takeover battle, the Darty board backed Fnac, before switching its allegiance to Conforama.

With its latest move, Conforama has now taken the lead in the takeover contest in purely financial terms.

But Darty shareholders also have a strategic decision to make. A tie-up with Fnac would strengthen the company's electronics business, whereas an alliance with Conforoma would create "a leading French household goods retailer", according to Conforama.

Fnac shares, listed in Paris, fell 1.80 percent to 56.73 euros as the potential cost of the takeover sky-rocketed, while Steinhoff, listed in Frankfurt, eased 0.4 percent to 5.42 euros.

Fnac said Thursday that it had secured firm commitments from two investment funds to sell it 22 percent of Darty's shares.

Conforama already owns 19.5 percent in Darty which it bought from a group of investors.

Mass-market retailer Steinhoff International employs 90,000 staff worldwide, runs 6,500 stores in 44 countries and last year had revenues of 104.7 billion South African rand ($7.3 billion, 6.5 billion euros).

It has been on the acquisition trail in Europe, but last month walked away from the bidding process for Britain's Home Retail Group, owner of catalogue chain Argos, where it faced off supermarket group Sainsbury's.

Fnac's turnover, at 3.9 billion euros, is lower than that of Steinhoff, but it has accelerated its worldwide expansion, last year opening five foreign outlets, including in Qatar and Ivory Coast. It employs just under 40 percent of its 14,500 staff outside France.

Darty had sales of 3.5 billion euros in 2015 while Conforama's revenues were 3.2 billion euros.