Retailer Kingfisher remains confident it would secure control of French DIY chain Castorama, despite shareholders rejecting a £3.2bn deal.
The owner of B&Q and Comet wants full control of Castorama – it already owns 45% – but a group of shareholders rejected the bid this week.
The shareholders, known as Commandite A, cited a host of reasons including financing not being in place and the “strategic, cultural and business error” of moving the headquarters to London.
But Kingfisher has hit back at the claims and said it was confident the deal would go ahead.
A spokeswoman said Kingfisher was in the process of meeting the three conditions laid down in 1998 for any future takeover.
These are that financing is in place, Kingfisher shareholders approve and European Union regulatory clearance has been received.
Kingfisher will fund the bid via a £2bn rights issue and the spokeswoman said this had already been underwritten.
In addition, shareholder approval will be sought at an EGM scheduled for June and an application for EU regulatory clearance has been submitted.
The spokeswoman also pointed out that a bid was not yet on the table, while a number of other Castorama shareholders had voiced their approval.
An independent bank will be appointed to assess the bid, but the spokeswoman said: “In reality there’s nothing that will stop it going through. The Commandite A are effectively delaying it, perhaps to push the price up a little bit, but that’s down to the bank to decide.”
Kingfisher is seeking to transform itself by spinning off its electrical retail business to focus on its DIY offering.
EGi News 17/05/02
