FTSE 100 Listed British Company Kingfisher to Acquire Mr Bricolage

The largest home improvement retailer in Europe, Kingfisher has announced that it is in the process of acquiring French company Mr Bricolage which also operates in the home improvement retail industry.

After this announcement, the share market saw Kingfisher’s shares to rise on Thursday. The acquisition would cost Kingfisher EUR 275 million. Kingfisher is currently having exclusive negotiation with the stakeholders of Mr Bricolage. As both companies fall into the same line of business, analysts are hopeful that the amalgam would perform better.

Kingfisher’s Chief Executive Ian Cheshire said, “ This would add a third, complementary strong business alongside Kingfisher’s existing two successful brands in France…” Kingfisher runs UK based retailing company B&Q.

The TOC governing the deal state that Kingfisher would buy 41.9% shares from  the Association Nationale des Promoteurs de Faites Le Vous-Mene which is a group of franchisees. Another 26.2% of stakes would be purchased from Tabur Family at a price of 15 EUR per share.

Kingfisher also announced that a mandatory offer to acquire the stocks that are being held by minority shareholders at a price of 15 EUR would be filed. The total debt of Mr Bricolage would be paid by KIngfisher. The net enterprise value would be 275 million EUR.

Kingfisher’s stock has gained on Thursday in FTSE. In fact it’s one of the companies listed in the FTSE 100 to make a sizable gain in this morning. At the mid of the day, the stock was up 2.5% at 442.10 pence per share.

The whole acquisition process could take this entire year to complete as Kingfisher said it is hoping the deal to finalize by the end of 2014-15 financial year i.e. in March 2015. The deal depends upon anti-trust clearance as the current franchisee and affiliates of Mr Bricolage would continue to exist and improve.

The initiation of the talk was observed on Wednesday when Kingfisher and the chief shareholders of Mr Bricolage signed a non binding memorandum of understanding. This is the beginning of exclusive negotiation process.

In future, the handlers of operating businesses of Kingfisher and Mr Bricolage will meet in France. Each will have its work council. The detailed commercial terms will be put before the franchisees of Mr Bricolage.

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