Fnac Darty: Envisaged acquisition of Unieuro
Ivry-sur-Seine, France — July 16, 2024, 6:00 PM
CEST
Envisaged acquisition of
Unieuro
Fnac Darty to consolidate its European leadership in
specialized retail
Stable H1 2024 preliminary
results1
2024 outlook confirmed
ENVISAGED ACQUISITION OF
UNIEURO
-
Intention to acquire Unieuro, the leading Italian
distributor of Consumer electronic products and Domestic
appliances
- Mixed
Public Offer2 to be
jointly filed by Fnac Darty and Ruby Equity
Investment3
- Offer
consideration includes €9.0 in cash and 0.10 Fnac Darty shares,
valuing Unieuro at €12.0 per
share4
-
Creation of a Group with over €10 billion in revenue and
nearly 30,000 employees5
- Strong operational and
geographical complementarities
- Aligned strategic visions
and ambitions on omnichannel, services, private label, and
sustainability
-
Projected synergies of over €20
million6, mostly from
improving buying terms
- EPS
accretion above 10% from 2025, including synergies
-
Positive impact on Group’s current operating income and
free cash flow
- Closing
expected in Q4 2024
H1 2024 PRELIMINARY
RESULTS1
- H1 2024
revenue of €3,390 million, up +1.4% on a reported data
basis
- Stable
current operating income
Enrique Martinez, CEO of Fnac Darty, states:
« This project is a unique opportunity for Fnac Darty to
continue its long-term ambition to consolidate its markets and
strengthen its business model at the European level.
Our geographical presence would be significantly expanded, and we
would support Unieuro in continuing its digitalization and
transformation towards more services, in line with our Everyday
strategic plan.
Ultimately, this project enables us to pursue our collective
ambition: to be the essential ally for European consumers,
supporting them in sustainable consumption.
In a challenging context for our sector, Fnac Darty has also
achieved stable results, allowing us to confirm our annual guidance
and approach the second half of the year with confidence and
determination. »
#1 POSITION IN ITALY THAT CONSOLIDATES
THE GROUP'S PRESENCE IN EUROPE
Unieuro is the Italian Leader in
Consumer electronics and Domestic appliances with a 17% market
share. In 2023, Unieuro achieved revenue of €2.6 billion,
with a compound annual growth rate of 8% over the 2016/17-2023/24
period7. It has a dense network of integrated and
affiliated stores throughout Italy, with a significant presence in
the North and Centre of the country (71% of stores). Additionally,
Unieuro is developing its services activities, including the
integration of Covercare, a specialist in repair and home
services.
The envisaged combination of Fnac Darty and
Unieuro is in line with the Everyday plan. Both entities share
common strategic ambitions focused on omnichannel, the development
of home assistance services, and guiding customers towards more
sustainable and responsible behaviours.
Fnac Darty, with a long tradition of integration
respecting local specificities, will ensure the sharing of
expertise to create new opportunities for both companies’
employees.
The combination between Fnac Darty and
Unieuro would create a leader in Consumer
electronics, Domestic appliances, Editorial products and Services
in Southern and Western Europe, with over €10 billion in revenue,
30,000 employees and more than 1,500 stores. The
combined entity would hold #1 or #2 positions in its main
markets.
The combination offers a potential for
operational run-rate synergies projected at over €20 million before
taxes, primarily from improved buying terms and the integration of
private label activity. Unieuro would also benefit from Fnac
Darty‘s expertise in terms of operational efficiency. Further
synergies will be explored post transaction.
The Group anticipates an accretive impact on its
Earnings Per Share above 10% from 2025, including run-rate
synergies, as well as a positive impact on its current operating
income and free cash flow.
DEAL STRUCTURING
The public offer would include for each Unieuro share:
- €9.0 in cash;
and
- 0.10 Fnac Darty
newly issued shares8.
This offer values Unieuro at €12.0 per share,
representing a premium of 42% based on the spot volume-weighted
average closing price as of July 15, 2024, and a 34% premium on the
volume-weighted average closing price over the last 3 months. This
implies an equity value9 for Unieuro of c.€249 million,
of which Fnac Darty already owns 4.4% of Unieuro’s share
capital.
The offer would allow Unieuro’s shareholders to
cash in their stake and to become shareholders of the combined
entity, with an opportunity to benefit from value creation
potential.
The Offer would be financed as follows:
- Fnac Darty and
Ruby Equity Investment plan to create a Joint investment vehicle
(held respectively at 51% and 49%) that will hold the stake in
Unieuro. This company would be controlled and consolidated by Fnac
Darty Group.
- The cash
component representing c.75% of the offer amount, would be financed
by Ruby Equity Investment and Fnac Darty in the respective
proportion of c.2/3 and c.1/3.
- The equity
component representing c.25% of the offer amount would be financed
by Fnac Darty through a share issuance of approximately 2.0 million
shares10, within the limits of the current
authorizations, and representing around 6.6% of Fnac Darty’s share
capital post-transaction.
- The Group’s net
debt increase would be limited to around
+€56 million11, allowing Fnac Darty to protect its
financial flexibility and pursue its capital allocation
policy.
The launch of the Public Tender should occur
after customary conditions related to Italian regulatory approvals
have been met. This transaction will be subject to review by the
relevant competition authorities.
Closing of the offer is expected over the course
of Q4 2024.
PRELIMINARY H1 2024 RESULTS, 2024
GUIDANCE CONFIRMED
The preliminary and unaudited IFRS results for
H1 2024 are estimated at:
- €3,390
million revenue, up +1.4% reported data and +0.1%
LFL12 (+2.1% reported data and
+0.8% LFL3 in Q2 2024).
- Current
operating income of -€36 million, stable compared to H1
2023.
The Group reaffirms its target to reach a
Current Operating Income (COI) for 2024 at least equal to
that of 2023 and a cumulative free cash flow from
operations13 of
approximately €500 million over the period 2021–2024
(i.e. €180 million in 2024).
The Group will publish its full H1 2024 results
on July 24, 2024, after market close, as already scheduled.
****************
CONFERENCE
CALL
Enrique
Martinez, Group Chief Executive Officer
and Jean-Brieuc Le Tinier, Group Chief Financial
Officer, will host a conference call on the envisaged
transaction in French, with live translation into English,
today at 6.30 PM Paris time, 5:30 p.m. (UK)
or 12:30 p.m. (East Coast USA).
Dial-in numbers:
France: +33 (0)1 70 91 87 04
UK: +44 1 212 81 80 04
USA: +1 718 705 87 96
Important information
This press release is for information
purposes only and does not constitute an offer to purchase, or a
solicitation of an offer to sell, any Unieuro financial
instruments.
The tender offer documentation which, if
filed, will include the terms and conditions of the tender offer,
will be subject to review by the Italian market authority (CONSOB).
Investors and shareholders are strongly advised to consult the
documentation relating to the tender offer when it becomes
available, if the offer is filed, as well as any amendments or
additions to these documents since they will contain important
information about the proposed transaction.
In particular, the transaction is subject to
the execution of definitive documentation and the obtaining of the
required regulatory approvals and other customary
conditions.
The tender offer has not been and will not
be made in the United States of America (including its territories
and possessions, any state of the United States of America and the
District of Columbia), Canada, Japan, Australia and any other
jurisdictions where making the offer or tendering therein would not
be in compliance with the securities or other laws or regulations
of such jurisdiction or would require any registration, approval or
filing with any regulatory authority, by using national or
international instruments of communication or commerce of such
excluded jurisdictions (including, by way of illustration, the
postal network, fax, telex, e-mail, telephone and internet),
through any structure of any of the excluded jurisdictions’
financial intermediaries or in any other way. No actions have been
taken or will be taken to make the offer possible in any of the
excluded jurisdictions.
Copies of any documents relating to the
tender offer, including this press release, are not and should not
be sent, or in any way transmitted, or otherwise distributed,
directly or indirectly, in the excluded jurisdictions. Any person
receiving any such documents shall not distribute, send or dispatch
them (whether by post or by any other mean or device of
communication or international commerce) in the excluded
jurisdictions. Any document relating to the offer, including this
press release, does not constitute and shall not be construed as an
offer of financial instruments addressed to persons domiciled
and/or resident in the excluded jurisdictions. No securities may be
offered or sold in the excluded jurisdictions without specific
authorization in accordance with the applicable provisions of the
local law of such jurisdictions or a waiver thereof.
Tendering in the offer by parties residing
in jurisdictions other than Italy may be subject to specific
obligations or restrictions imposed by applicable legal or
regulatory provisions of such jurisdictions. Recipients of the
offer are solely responsible for complying with such laws and,
therefore, before tendering in the offer, they are responsible for
determining whether such laws exist and are applicable by relying
on their own counsel or other advisors. Fnac Darty does not accept
any liability for any violation by any person of any of the above
restrictions.
Disclaimer
Pursuant to Commission Implementing Regulation (EU) 2016/1055
of 29 June 2016 laying down implementing technical standards with
regard to the technical means for appropriate public disclosure of
inside information and for delaying the public disclosure of inside
information in accordance with Regulation (EU) No 596/2014 of the
European Parliament and of the Council, this press release may
contain inside information and has been communicated to Fnac Darty
SA's authorised distributor.
This press release may include forward-looking statements and
language indicating trends, such as the words "anticipates",
"estimates", "expects", "believes", "could", "should", "would",
"intends", "may", "potential" and similar expressions. These
forward-looking statements are based solely on information
currently available and are applicable only as of the date of this
press release. Such forward-looking statements are based on current
expectations and are subject to important economic, competitive and
business risks, uncertainties and contingencies, which are unknown
or which Fnac Darty and Unieuro are unable to predict or control.
Such factors could cause Fnac Darty's and/or Unieuro's actual
results, performance or plans in connection with the transaction to
differ materially from any future results, performance or plans
expressed or implied by such forward-looking statements. Neither
Fnac Darty, Unieuro nor any of their advisers accepts
responsibility for any financial information contained in this
press release relating to the business, operations, results or
financial position of the other entity or its group. Fnac Darty,
Unieuro and their advisers disclaim any obligation or undertaking
to release any update or revision to any forward-looking statement
contained in this press release to reflect any change in
expectations or events, conditions or circumstances on which any
such statement is based.
About Fnac Darty
Operating in 13 countries, Fnac Darty is a European leader in
the retail of entertainment and leisure products, consumer
electronics and domestic appliances. The Group, which has almost
25,000 employees, has a multi-format network of more than 1,000
stores at the end of December 2023, and is ranked as a major
e-commerce player in France (more than 27 million unique visitors
per month on average) with its three merchant sites, fnac.com,
darty.com and natureetdecouvertes.com. A leading omnichannel
player, Fnac Darty’s revenue was around €8 billion in 2023, 22% of
which was realized online. For more information:
www.fnacdarty.com
CONTACTS
ANALYSTS/INVESTORS
Domitille Vielle – Head of Investor Relations –
domitille.vielle@fnacdarty.com – +33 (0)6 03 86 05 02
Laura Parisot – Investor Relations Manager –
laura.parisot@fnacdarty.com – +33 (0)6 64 74 27 18
PRESS
Audrey Bouchard – Head of Media Relations and Reputation –
audrey.bouchard@fnacdarty.com – +33 (0)6 17 25 03 77
1 Unaudited figures
2 Mixed Offer made of a cash branch for 75% and a share branch for
25%
3 Joint investment vehicle held at 51% by Fnac Darty and by 49% by
Ruby Equity Investment (an affiliate of Vesa Equity Investment),
consolidated by Fnac Darty
4 Based on Fnac Darty closing share price of €30.20 as of July 15,
2024
5 Combination of public annual information made public by the 2
entities as of December 31, 2023 for Fnac Darty and as of February
28, 2024 for Unieuro
6 Run rate starting 2025
7 Unieuro’s fiscal year: end-February
8 Based on latest Fnac Darty closing share price of €30.20 as of
July 15, 2024
9 Based on 20.7 million outstanding shares
10 Based on Fnac Darty latest closing price of €30.20 as of July
15, 2024
11 Excluding transaction fees
12 Like-for-like basis – LFL: excludes the effect of changes in
foreign exchange rates, changes in scope, and store openings and
closures
13 Excluding IFRS 16.
- PR_Tosca - announcement (ENG)_16 07 2024
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