FNAC DARTY: Fnac Darty has its eye on La Grande Récré, according to LSA
FNAC DARTY: (BUY, Fair Value EUR108 (+28%))Fnac Darty has its eye on La Grande Récré, according to LSA
LSA reported yesterday that Fnac Darty would have filed a bid offer for c.105 stores of Ludendo (La Grande Récré’s owner). Such deal would strengthen Fnac Darty’s position in the toy market, which seems less deflationary and more profitable than consumer electronics. Pending the court verdict in late July, at first sight, risks linked to such deal seem to be limited: financing of the deal is secured; strong track-record of integration; toy is not a new market for Fnac; cross-selling and omnichannel efforts can ensure market share gains in a decelerating market where Amazon strong. Given the lack of figures on La Grande Récré, we are just concerned by the potential amount of restructuring costs needed to turn around the company.
Fnac Darty is engaged in the leisure and entertainment, technology, and household appliances retail market in France and a player on markets in other countries where it operates such as Spain, Portugal, Belgium, the Netherlands and Switzerland. Fnac Darty also has franchise operations in Morocco, Qatar and Ivory Coast.
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