Comet poised for solo flight
KINGFISHER'S board is putting the final touches to its strategic review and has agreed that the flotation of its Comet electricals arm would achieve best value for shareholders.
The retailer is still trying to secure a deal to buy out the minority stake in French DIY firm Castorama, but insiders say great progress has been made in recent weeks.
Chairman Francis Mackay, who announced the review in March, does not want to keep investors waiting much longer. Shareholders are frustrated at the poor performance of the group's share price.
Chief executive Sir Geoffrey Mulcahy, who is likely to retire this year, has come under fire for dithering over last year's disposal of Superdrug and Woolworths.
In 1998, Kingfisher merged its B&Q DIY business with Castorama in return for a 55% stake in the enlarged group. But the French side has performed poorly and analysts would like Kingfisher to take full control. At current prices, this would cost about £2.8bn. Part would be funded by a rights issue.
In order to focus on DIY, it makes sense for Kingfisher to offload its electrical interests. These include Comet in the UK, Darty in France and ProMarkt in Germany. Dixons would love to buy Darty to increase its overseas presence, but Kingfisher reckons it will get a higher premium by floating the business. However, if it can agree a sale at a decent price, the money could help finance the Castorama deal. Darty is valued at more than £1bn, while Comet could fetch £300m-£500m.
Kingfisher rose 4p to 383 1/2p on hopes its future will soon be resolved. The shares have slumped from 953p since 1999, though Woolies is valued separately at £707m.
