Fantastic leap in shares as takeover offer brings $361m to the table

THE flurry of deal-making reshaping the retail landscape continues with the global giant behind Freedom and Snooze moving on discount rival Fantastic Furniture.

Shares in Fantastic Holding surged by 40 per cent yesterday after South African listed Steinhoff International offered to buy the company outright for $361.4 million.

The Fantastic board is backing the deal and major share- holders, who account for more than 50 per cent of its shares, intend to vote in favour of it.

Steinhoff owns the Freedom, Snooze and Bay Leather Republic furniture brands in Australia, as well as Harris Scarfe and Best & Less.

The retail conglomerate, which generates close to $10 billion in annual revenues, operates 6500 outlets in 30 countries under several brands.

Fantastic Holdings runs 126 stores under the Fantastic, Plush, Le Cornu and the Original Mattress Factory brands.

Steinhoff is offering Fantastic shareholders $3.50 a share, a hefty 43 per cent premium to Thursday’s closing price.

Fantastic has disappointed shareholders in recent years, suffering from a high-profile product recall of one of its chairs and the sudden departure of key executives.

Its share price had more than halved since 2013 before yesterday’s bid.

Fantastic chairman Julian Tertini, who owns 40 per cent of the company, faced calls to buy out minority shareholders and take the business private in earlier this year.

Yesterday he said the Steinhoff offer was a good deal for shareholders and recognised the underlying value of the company.

“This is a compelling proposal and provides Fantastic Holdings shareholders with the opportunity to realise a significant premium, reflecting the underlying strength of our brands, operations and people,” he said.

Steinhoff Asia Pacific director Tim Schaafsma said Fan- tastic was a complementary business in terms of market segments, customer base and vertical integration.

“The addition ... will broaden our brand portfolio and accelerate the growth of Steinhoff Asia Pacific in Australasia,” he said.

The retail deal comes after JB Hi-Fi last month stumped up $870 million to buy The Good Guys.

Woolworths is closing its disastrous Masters hardware experiment having sold the stores to a consortium backed by the Spotlight Group and Chemist Warehouse for $835 million.

Mite 10-owner Metcash picked up Home Timber & Hardware for $165 million from Woolworths and is now gearing up to take on sector heavyweight Bunnings.

The Fantastic deal must be signed off on by the Foreign Investment Review Board and the parties have asked the competition watchdog to provide it with the all clear.

Shares in Fantastic closed at $3.43.