Fantastic Holdings Limited (ASX: FAN) is likely to see its share price jump today after receiving a takeover offer.

In an announcement to the ASX, the furniture retailer and owner of brands Fantastic Furniture, Plush, Original Mattress Factory and LeCornu, says it has agreed to a takeover deal with Steinhoff Asia Pacific Holdings (Steinhoff).

Fantastic Furniture brands

Source: Fantastic Furniture

 

The deal values Fantastic at $361.4 million, with $3.50 in cash per share being offered by Steinhoff. That’s 43% more than the last closing price of $2.45.

It’s highly likely the deal will be successful for a number of reasons:

  • Significant premium being offered
  • Fantastic’s directors unanimously recommend shareholders vote in favour of the scheme, and they all intend to vote in favour of it
  • Major shareholders controlling more than 50% of Fantastic also intend to vote in favour of the scheme

The deal will need the approval of the Australian Competition and Consumer Commission (ACCC) as Steinhoff Asia Pacific does operate in some of the same segments as Fantastic.

Steinhoff Asia Pacific is an integrated discount retailer operating in Europe, Africa and Australasia. The company currently owns brands including Freedom, Bay Leather Republic, Snooze, POCO – The Super Home Market, BBO – Big Brand Outlet and supply chain company Unitrans.

steinhoff-asia-pacific brands

Source: Steinhoff Asia Pacific

 

However, the deal is unlikely to lessen competition, given Steinhoff’s brands appear to be slightly more ‘upmarket’ than Fantastic’s offerings. Bay Leather Republic, for example, appears to offer products at higher price points like furniture retailer Nick Scali Limited (ASX: NCK) and Steinhoff’s Freedom Furniture is more comparable to Harvey Norman Holdings Limited (ASX: HVN) than Fantastic.

Discover the 'new breed' of blue chips that could take your portfolio higher in 2016

Forget BHP and Woolworths. These 3 "new breed" top blue chips for 2016 pay fully franked dividends and offer the very real prospect of significant capital appreciation. Click here to learn more.

The report is free! No credit card required.

HOT OFF THE PRESSES: Motley Fool’s #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.

Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.