Among the reams of documents filed in the US for the proposed €79 million Smyths Toys takeover of the central European division of Toys R Us, there is some redacted material about the financing of the bid and how payments will be structured. What could be so secret about some portions of the transaction?
Smyths is proposing to buy 93 mostly German (with some Swiss and Austrian) Toys R Us stores, instantly launching the Irish company to the top of the table of speciality toy retailers in Europe.
Group sales at its existing 110-strong network are nearing €600 million, and this deal will put the €1 billion barrier in Smyths’ sights. Yet it is hungry for more.
Tony Smyth, a director of the family-owned group, suggested last month that Smyths sees the central European Toys R Us deal as a springboard for further continental expansion: "It provides a great starting point for our expansion."
Pan-European force
Market watchers have speculated that the possible sale of a further 100 or so Toys R Us outlets in France and Spain could provide yet another opportunity for Smyths to expand, turning it into a truly pan-European force.
Intriguingly, a note in the sale documents for the Smyths buyout of the central European division says that some of the financial material has been redacted so as not to disclose it to Toys R Us in Spain and France.
Could this be an indication that Smyths is interested in the French and Spanish assets? Not so, the Irish group says.
Smyths rarely talks to the media, but last night it confirmed that “we have no plans for France or Spain TRU [Toys R Us]”. It appears the central European deal is enough for the Smyth family from Mayo. For now.
But given the head-spinning rate at which Smyths has grown in recent years, especially in the UK, don’t expect the family to press pause on its expansion game for too long.
