Up to six banks taking part in a beauty parade to find advisers for a float of Fantastic Furniture should learn this week if they have been successful in securing the two roles on offer.
It is understood that the pitches took place in Sydney last week ahead of what is expected to be an attempted initial public offering that is likely to value the company somewhere between $250m and $500m. The successful candidates are expected to be mandated in the coming days.
Fantastic Furniture is owned by Greenlit Brands, which is the Australian subsidiary of Steinhoff International, a company that more than two years ago came close to collapse.
Greenlit Brands also owns Freedom Furniture and Plush, but Fantastic Furniture is thought to be the strongest performer and, based on the need of the South Africa-based parent company to find more cash, it is expected to be a motivated seller.
The Australian subsidiary is now run by the former boss of The Good Guys, Michael Ford, who worked with Bank of America when that business was sold to JB Hi-Fi in 2016, along with UBS, Credit Suisse and Goldman Sachs that were appointed for a potential float that did not eventuate.
Such names could be well placed this time around, along with Macquarie Capital, which worked on the JB Hi-Fi side of the deal.
But US-based banks including Citi, JPMorgan and Bank of America all reported losses related to the demise of Steinhoff International, so it will be interesting to see if that affects its decision to represent the company this time around.
Already, advisory firm Rothschild works for Greenlit Brands, while Monash Private Capital has also been an adviser and Deutsche Bank has been a financier.
No doubt the company will be hoping to capitalise on the current strong market value of Fantastic Furniture’s listed competitor Nick Scali, which is currently trading at about 13.5 times its earnings for the 2021 financial year.
The logic for a listing is that Fantastic Furniture could be better positioned than some retailers in the current COVID-19-affected market conditions given that it sells furniture in the more affordable end of the market.
Founded in 1989 by Paul Harding and Jonathan De Jong, Fantastic Furniture has more than 70 stores nationally.
Steinhoff purchased Fantastic Furniture when it was listed in 2016 for $361m.
It collapsed into administration during 1996 after a rapid expansion, but was later restructured and listed.
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