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Unieuro Founders Oppose Fnac Bid Citing Steep Undervaluation

A Fnac Darty SA store in London, UK, on Wednesday, Aug. 30, 2023. Britain’s broad money supply has stopped growing for the first time in at least 13 years, a reading that will deepen concerns among monetarists urging the Bank of England to show restraint in its battle against inflation. Photographer: Jose Sarmento Matos/Bloomberg (Jose Sarmento Matos/Bloomberg)

(Bloomberg) -- The founders of Unieuro SpA are opposing a bid from Fnac Darty SA on the grounds that it significantly undervalues the Italian electronics retailer.

A July takeover offer from France’s Fnac Darty values Unieuro at about €250 million ($277 million), while fair value “is in a range between €350 million and €380 million,” founders Giuseppe and Maria Grazia Silvestrini said in a joint interview with Bloomberg.

The bid from Fnac Darty, whose top shareholder is billionaire Daniel Kretinsky, “doesn’t take our growth strategy into account,” the Silvestrinis said in their first public comments about the offer. 

Unieuro shares rose as much as 2% in Milan on Tuesday and were up 1.4% at 3:44 p.m. local time. 

The company last week slightly raised its full-year profit outlook, targeting adjusted earnings before interest and taxes of more than €40 million for the fiscal year ending February 2025, compared with a previous range of €35 million to €40 million. 

Still, the new outlook is on the conservative side, the Silvestrinis said. “Our strategy focused on tailor-made consumer services could allow us to get to €50 million in Ebit.”

The Silvestrini family has a combined stake of just below 10% of Unieuro, making it the second-largest shareholder behind French mobile carrier Iliad SA.  

Rapid Expansion

The siblings took over the family-owned group, then called SGM Distribuzione, in the 1970s, kicking off a rapid expansion program that eventually attracted private equity group Rhone Capital. The Silvestrinis then in 2013 bought and relaunched the existing Unieuro brand, listing it in 2017.  

If Unieuro remains independent, it could in the future weigh a shape-shifting deal with a European peer to expand its business outside Italy, the Silvestrinis said.

The Italian government has considered placing restrictions on the Fnac Darty offer over concerns about sensitive customer data, including information linked to digital payments, Bloomberg reported last month, citing people familiar with the matter.

The moves could follow protocols under the country’s so-called golden power legislation which permits Rome to halt or modify deals involving areas deemed to be strategic.

“Unieuro manages millions of pieces of highly sensitive customer data, that’s a delicate aspect that can’t be underestimated,” the Silvestrinis said.  

--With assistance from Tiago Ramos Alfaro.

(Updates with shares in fourth paragraph.)

©2024 Bloomberg L.P.