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Furniture giants agree on $361m takeover

AAP logoAAP 13/10/2016

Furniture maker and retailer Fantastic has agreed to a $361 million takeover by its larger rival Steinhoff Asia Pacific, the owner of the Freedom and Snooze brands.

Fantastic shares soared on news of the deal, gaining 40 per cent, or 98 cents, to $3.43, a three-and-a-half year high.

Steinhoff, owned by South Africa's Steinhoff International, is offering Fantastic shareholders $3.50 per share in cash, a premium of 43 per cent on Fantastic's Thursday share price.

Fantastic's board has unanimously recommended the bid be accepted, subject to the opinion of an independent expert.

The retailer's two major shareholders, chairman Julian Tertini and Peter Brennan, who between them own 50.8 per cent of the company - have indicated they will vote in favour of the bid.

"This is a compelling proposal and provides Fantastic Holdings' shareholders with the opportunity to realise a significant premium, reflecting the underlying strength of our brands, operations and people," Mr Tertini said.

Fantastic owns the Fantastic Furniture and Plush brands, and made an annual net profit of $11.4 million in 2015/16, with its bottom line taking a hit from the closure of its loss-making Le Cornu furniture business in Adelaide. The brand continues to operate in Darwin.

"Fantastic is a complementary business in terms of market segments, customer base and vertical integration," Steinhoff director Tim Schaafsma said in a statement.

"The addition of Fantastic Holdings, its brands and manufacturing operations will broaden our brand portfolio and accelerate the growth of Steinhoff Asia Pacific in Australasia".

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