FNAC DARTY Further details on the bid offe for La Grande Récré
LSA reported yesterday further details on Fnac Darty’s bid offer for La Grande Récré, which is still subject to a court ruling in the second half of July. The acquisition would be very cheap (only EUR16m) for 106 stores, but it also implies a substantial investment plan (EUR115m of CAPEX) to fuel an ambitious turnaround plan: 1/ narrow price gap with competitors; 2/ digitalize the business model and; 3/ bet on cross-selling through the roll-out of shop-in-shops and click & collect options. At this early stage and given the details available, we now estimate the deal could be positive on Fnac Darty’s 2018-21e CAGR growth (+90bp) and slightly dilutive on EBIT margins (-30bp on average over the period).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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