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Spanner in le works: Kingfisher buyout of French DIY chain under threat Spanner in le works: Kingfisher buyout of French DIY chain under threat
(about 3 hours later)
Kingfisher is battling to save the €275m (£185m) takeover of Mr Bricolage, after the French DIY chain’s board and major shareholder withdrew their backing for the deal,because of concerns about the number of stores that could close. Kingfisher is battling to save the €275m (£185m) takeover of Mr Bricolage, after the French DIY chain’s board and major shareholder withdrew their backing for the deal,because of concerns about the number of stores that might close.
Kingfisher, which is understood to be growing impatient after its long-running pursuit of Mr Bricolage, said it was considering “all of its options”. Europe’s largest home improvement retailer, which owns B&Q and Screwfix in the UK and Castorama in France, said it had entered into a binding agreement with the main shareholders of Mr Bricolage to acquire their holdings last July, subject to regulatory clearance. Kingfisher, which is understood to be growing impatient after its long-running pursuit of Mr Bricolage, said it was considering “all of its options”. Europe’s largest home improvement retailer, which owns B&Q and Screwfix in the UK, said it had entered into a binding agreement with the main shareholders of Mr Bricolage to acquire their holdings last July, subject to regulatory clearance.
Under the terms of the proposed deal, Kingfisher would acquire 41.9% from ANPF, the network of Mr Bricolage franchisees, and 26.2% from the founding Tabur family for €15 a share. Mr Bricolage shares have been suspended at the company’s request since Monday, when it emerged that its board and the ANPF had reservations about the deal. This took Kingfisher by surprise. Under the terms of the proposed deal, Kingfisher would acquire 41.9% from the ANPF, the network of Mr Bricolage franchisees, and 26.2% from the founding Tabur family for €15 a share. Mr Bricolage shares have been suspended at the company’s request since Monday, when it emerged that its board and the ANPF had reservations about the deal. This took Kingfisher by surprise.
Kingfisher said in its latest update: “At a late stage Mr Bricolage and the ANPF indicated that the undertakings in France required to obtain the competition clearance were no longer in their interests. Without the consent of Mr Bricolage and the ANPF, the competition clearance undertakings necessary to finalise the transaction cannot be given.” Kingfisher’s shares fell 1.5% to 358.7p.Kingfisher said in its latest update: “At a late stage Mr Bricolage and the ANPF indicated that the undertakings in France required to obtain the competition clearance were no longer in their interests. Without the consent of Mr Bricolage and the ANPF, the competition clearance undertakings necessary to finalise the transaction cannot be given.” Kingfisher’s shares fell 1.5% to 358.7p.
The proposed deal was submitted to competition authorities in late January. It is thought that 33 franchise stores and 11 directly owned Mr Bricolage shops – out of a total of about 500 in France – would have to be sold to satisfy the regulator. Kingfisher already owns the Castorama and Brico Dépôt chains in France.The proposed deal was submitted to competition authorities in late January. It is thought that 33 franchise stores and 11 directly owned Mr Bricolage shops – out of a total of about 500 in France – would have to be sold to satisfy the regulator. Kingfisher already owns the Castorama and Brico Dépôt chains in France.
Mr Bricolage argued on Wednesday that a large number of stores would have to close and this would destabilise its franchise networ, which could “seriously jeopardise” the company’s interests. The Tabur family, which has kept a stake in Mr Bricolage since selling the business in 2002, remained committed to the deal with Kingfisher. Mr Bricolage argued on Wednesday that a large number of stores would have to close and this would destabilise its franchise network, which could “seriously jeopardise” the company’s interests. The Tabur family, which has kept a stake in Mr Bricolage since selling the business in 2002, remained committed to the deal with Kingfisher.
Mr Bricolage released a statement, saying: “The board of directors of Mr Bricolage believes that had the commitments proposed by Kingfisher been implemented, it would have led a large number of stores under the Mr Bricolage and Les Briconautes brands to exit France definitively and, furthermore, to the termination of Mr Bricolage group relationships with certain affiliated non-brand stores, beyond what had been anticipated by the parties.”Mr Bricolage released a statement, saying: “The board of directors of Mr Bricolage believes that had the commitments proposed by Kingfisher been implemented, it would have led a large number of stores under the Mr Bricolage and Les Briconautes brands to exit France definitively and, furthermore, to the termination of Mr Bricolage group relationships with certain affiliated non-brand stores, beyond what had been anticipated by the parties.”
Kingfisher’s new chief executive, Véronique Laury, who previously ran Castorama, will unveil her strategy at the full-year results next Tuesday.Kingfisher’s new chief executive, Véronique Laury, who previously ran Castorama, will unveil her strategy at the full-year results next Tuesday.