UK retail group Kingfisher is bidding £3.2bn for the outstanding shares in French DIY giant Castorama which owns B&Q plc.
Kingfisher backed B&Q into Castorama in 1998 to give it 56% of the company. Now Kingfisher is poised to acquire the remaining 44% stake by raising £2bn through a rights issue and the remaining funds by additional bank debt facilities.
The company also intends to separate its home improvement and electricals divisions into two companies to give ‘greater strategic focus’. The electricals division comprises Comet in the UK and Darty in France.
Castorama chairman Jean-Hughes Loyez is fighting the deal and has resigned from Kingfisher’s board.
Despite a French court rejecting his appeal to examine the validity of the bid, Mr Loyez claims the deal’s independent valuer, the bank Schroder Salomon Smith Barney, has links with Kingfisher and is therefore not impartial.
