Business

Kingfisher abandons planned purchase of Mr Bricolage

Mr Bricolage website Image copyright Mr Bricolage

The owner of B&Q has abandoned its planned purchase of French DIY chain Mr Bricolage.

Kingfisher has confirmed to the market that the €275m (£200m) deal, first announced last year, would not proceed.

The company already owns the Castorama chain in France and the deal depended on regulatory approval.

It emerged last week that some Mr Bricolage shareholders opposed the deal.

Shares in Kingfisher rose 3.1%, or 11.1p, to 368.9p in afternoon trading in London, making it the top riser on the FTSE 100. The company is worth more than £8.5bn.

ANPF, an organisation controlled by Mr Bricolage franchisees that holds almost 42% of the retailer's shares, last week decided to oppose the deal.

Closure fears

Kingfisher had set a deadline of 31 March for regulatory approval of the takeover.

"Notwithstanding Kingfisher's efforts to pursue the completion of the transaction, and in light of the positions expressed to date by the ANPF and Mr Bricolage, the anti-trust clearance will not be obtained by 31 March 2015 and therefore the July 2014 agreement will lapse on that date," the company said on Monday.

"Consequently the transaction will not proceed. Kingfisher is considering all of its options."

Some Mr Bricolage franchisees are understood to fear the store closures that would be required for Kingfisher to win regulatory approval of the takeover.

The failure of the deal is a blow to Veronique Laury, the former Castorama boss who took over from Sir Ian Cheshire as chief executive last September.

She will preside over her first set of annual results for Kingfisher on Tuesday.

Andrew Hughes, a UBS analyst, expects pre-tax profits to be 10% lower than 2013 at £670m.

Challenges facing Ms Laury include reducing the amount of floorspace occupied by B&Q stores and generating further growth in Europe following the collapse of the Mr Bricolage deal.

In December, the company said it would sell a 70% stake in B&Q China, which has 39 stores and more than 3,000 staff, for £140m.

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