A bidding war has broken out between retailers Fnac and Conforama after both companies raised their offers for the electricals group Darty today in a race to outbid eachother.
The stakes were raised last night when Conforama, a French homeware retailer owned by South Africa's Steinhoff, increased its cash offer for shares in Darty to 138p per share.
The group also revealed that it has amassed a 19.5 per cent stake in the company after buying shares from investors including Majedie Asset Management, UBS, Schroder Investment Management and Standard Life Investments.
Fnac, a rival French electronics and music retailer, responded this morning by upping its previous offer to 145p a share in cash, valuing the UK-listed firm at £779m. It has also offered shareholders the option of receiving four Fnac shares for every 125 Darty shares they own.
However, that has been met by a second counterbid from Conforama of 150p per share.
Shares in Darty have leapt by more than 20 per cent today to 159p, which values the company at over £840m. Fnac shares edged down by 0.4 per cent to €57.33.
In a statement, Darty said "The board will carefully consider these two announcements and will provide further advice to Darty shareholders in due course."
Darty is Europe's third-largest electrical goods retailer with some 400 stores in Europe and earns 70 per cent of its revenue in the French market. It was renamed from Kesa in 2012 after selling its troubled UK arm Comet after failing to turn around the chain, but kept its UK listing.
The retailer has been in takeover talks with its rival Fnac since September last year, and had agreed to a £558m takeover in March until Conforama gatecrashed talks with a £662m cash and share offer.
Conforama's bid was made just two weeks after its parent company Steinhoff made a similar last-minute move on Home Retail Group. The retail conglomerate, which majority owned by South African billionaire businessman Christo Weise, walked away from Home Retail last month to focus on Darty.
Both bidders are hoping to make synergies by combining with Darty and increase their footprint in what has been an increasingly competitive market. For Fnac, which has 184 stores, the deal will helps reduce its exposure to the declining DVD, CD and books market "creating a leader in the French electronics, editorial and home appliances retail market."