In the spotlight - the race for Super de Boer
It is a story that is changing by the day but one thing seems certain - Dutch retailer Super de Boer is set to have a new owner. After struggling for much of the 2000s, the business is ending the decade as one of the European food sector's big M&A stories of the year. And, as Dean Best reports, champagne corks are likely to be popping at its majority owner, France's Groupe Casino.
The queue to buy Super de Boer, the Dutch retailer, seems to get bigger by the day.
As things stand today (9 October), two rival offers for Super de Boer are on the table - one from privately-owned Dutch retailer Jumbo and another from Dutch retail co-operative Sperwer Group.
Jumbo lodged its EUR4.20 (US$6.19)-a-share bid for Super de Boer three weeks ago and is currently in exclusive talks with the retailer's majority owner - French grocer Groupe Casino.
However, Jumbo's right to hold exclusive talks runs out in a matter of days and, waiting in the wings, is Sperwer, which made its own offer - worth EUR4.50 a share - on Monday.
So far, so clear. However, throughout this week, Jumbo and Sperwer have both won support from two more of the Netherlands' leading retailers.
Schuitema, which runs the C1000 chain and which had been linked to a joint bid for Super de Boer with Sperwer, has instead headed to Jumbo's corner. Should Jumbo prevail, Schuitema has agreed to snap up 80 Super de Boer outlets.
In Sperwer's corner stands Ahold, the Dutch retail giant behind the market-leading Albert Heijn chain. Ahold has struck a deal to buy around 40 stores if Sperwer wins the race for Super de Boer.
In a further twist, one Dutch newspaper claimed yesterday that Jumbo and Sperwer - the leaders of the two rival camps - were also in separate discussions over a possible carve-up of Super de Boer. That rumour, however, was swiftly denied by Sperwer.
In short, then, there are two groups bidding for Super de Boer. Jumbo is in exclusive talks with Casino but Sperwer has been granted due diligence on Super de Boer and believes its higher offer for the business leaves it well positioned to win through.
According to some industry watchers, however, the prospects of a bidding war remain strong.
The pact between Jumbo and Schuitema includes an agreement to form a purchasing venture that the latter has claimed will create a "powerful player" on the Dutch market.
The purchasing agreement with Schuitema is an indication that Jumbo is prepared to leave Dutch buying group Superunie, a consortium of 16 independent retailers, that, according to data from IGD, accounts for a third of retail sales in the country.
Richard Withagen, a Dutch food retail analyst at SNS Securities, believes Jumbo's apparent willingness to quit Superunie means the company is likely to hit back with a higher bid for Super de Boer.
"If the end game is that Jumbo doesn't buy Super de Boer and is still out of the consortium, it will end up with Schuitema with around 16-17% [of the market]," Withagen says. "The chances are that [Jumbo] will come out with a higher bid."
Excluding the Superunie consortium, IGD data for 2008 has Super de Boer as the third-largest food retailer in the Netherlands, with a market share of 6.4%. All of the country's grocers have struggled in the shadow of Ahold's Albert Heijn but Super de Boer, in spite of asset disposals and a corporate revamp that saw its name change from Laurus, has been a particular victim of the strength of the Dutch market leader.
"Ahold started a price war in 2003 and that was aimed mainly at the discounters," Verdict Research analyst Daniel Lucht says. "But it didn't effect the discounters and Super de Boer got quite squeezed."
With analysts agreeing that competition in the Dutch food retail sector remains intense, perhaps it should come as little surprise that Super de Boer continues to tread water - and that other players see M&A as an effective way of grabbing market share.
Moreover, Withagen and Lucht both agree that, whatever the outcome of the race for Super de Boer, there will be one clear winner - Casino.
The French retailer, which owns a 57% stake in Super de Boer, bought into the then-Laurus back in 2002. The deal came as Dutch banks were propping up Laurus' businesses in Spain and Belgium.
"I don't know whether that was a good acquisition for Casino," Lucht ponders. "Obviously they are relieved that someone is going to take that off their hands."
There seems little doubt that the prospect of a bidding war for Super de Boer has some firm backers south of the border in France.
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