Kingfisher rights limit

KINGFISHER, the group negotiating to buy the French electrical retailer Darty, is hoping to limit its expected cash call to about pounds 350m, by taking on pounds 500m of Darty debt and paying the purchase price partly with newly issued paper, writes Patrick Hosking.

Fears that Kingfisher would have to launch a rights issue of up to pounds 800m to finance the prospective deal hit its share price last week. But the group is understood to be sanguine about taking on the extra borrowings instead.

Gearing is expected to rise from less than 10 per cent to well over 50 per cent. But both Kingfisher - which owns Woolworth and Comet - and the acquisition are highly cash generative, so gearing would quickly fall.

According to a report in the French newspaper Le Figaro, Kingfisher is planning to pay Darty shareholders Fr1.6bn ( pounds 200m) in cash and pounds 300m in new shares. They would retain a 12 per cent stake in the business.

Nigel Whittaker, corporate affairs director of Kingfisher, said: 'I have read the French press with interest, but I am unable to comment at this time.'