Johannesburg - Integrated discount retailer Steinhoff International is pushing ahead with its acquisition spree, announcing on Friday that it planned to buy 100 percent of Sydney-based retailer Fantastic Holdings for A$361 million (R3.93 billion).
The acquisition brings the number of companies acquired by Steinhoff to four this year. Steinhoff offered A$3.50 in cash per share for the Fantastic Holdings acquisition.
The South African furniture and general retailer, which is expanding its business abroad, last month raised capital after a string of acquisitions.
Major shareholders, holding more than 50 percent in Fantastic Holdings, had indicated they would vote in favour of the deal, the Australian firm said. Fantastic, which operates chains such as Fantastic Furniture, Plush, Le Cornu and Original Mattress Factory, has 126 retail stores in Australia.
Steinhoff has spent no less than R70bn in acquisitions this year; it paid R12bn for UK company Poundland while US Mattress Firm cost Steinhoff in the region of R55bn. With the expected addition of Fantastic Holdings, the company’s spending will surpass R70bn spent on acquisitions this year. The spending for the year excludes money spent on the South African acquisition of Tekkie Town, which the company didn’t disclose when it announced the deal early last month.
Steinhoff said it had agreed on a scheme under which its Asia Pacific unit would acquire all Fantastic Holdings issued shares.
The company now has a retail presence in 30 countries all over the world.
Suvasha Kander, a fund manager at Ashburton Investments, said the nature of the deal was still difficult to view as the information was not yet available.
“We are still waiting for them to release information from their side. The information has come from Fantastic Holdings only. However, the proposed offer of A$3.50 per share was well received by Fantastic Holdings share price as it climbed on the Australian exchange. Steinhoff’s offer is quite good because Fantastic Holdings’ share price was around A$2.45 per share on their stock exchange,” Kander said.
The deal is still subject to the approval of the Australian Competition and Consumer Commission.
Steinhoff shares rose 2.46 percent on the JSE on Friday to close at R74.61.
BUSINESS REPORT