Darty PLC (LON:DRTY) opened at 81.50 on Monday. Darty PLC has a 1-year low of GBX 62.00 and a 1-year high of GBX 83.75. The firm’s 50 day moving average price is GBX 73.66 and its 200-day moving average price is GBX 71.58. A 25% premium for a controlling stake in one of Europe’s largest electronic and white goods retailers is too low. Macro-indicators are improving and the proposed offer appears opportunistic in our view. Q1 trading for Darty was ahead of expectations; several catalysts exist. London-based hard seltzer brand Drty released The Drty Hard Seltzer Handbook, which looks at the origin of the category, other brands in the market, consumer demographics, case studies, market size and future predictions.

Since the first hard seltzer brands started launching in the UK in 2019, there has been a rush of entrants, from some of the largest multinationals – AB Inbev, Coca Cola, White Claw, and Kopparberg – to small independents and start-ups, such as DRTY, Good One, Served. It also includes commentary and predictions from industry and category experts, including Waitrose buyer John Vine, consumer insights director alcohol at Kantar Worldpanel Tom Mallett, and CGA Strategy’s Tom Mulcauley. Drty’s new branding, created in collaboration with brand agency Studio Juice, will role out through all sales channels in the coming weeks. The term ‘hard seltzer’ has never sat easily with UK consumers. And what should’ve arguably been a pivotal moment for the category in 2020, as it rode the wave across the Atlantic, was eclipsed by a global pandemic. According to Google Trends data, the top five trending countries for the category are the US, Norway, Ireland, Canada and the UK.After fermentation, the mix is blended with purified sparkling water and natural fruit flavours to create the end product.

In the on-trade, the report noted that venues should consider giving at least two spaces in fridges to hard seltzers. The report said hard seltzer consumers are more likely to visit on-trade venues, have more disposable income and are willing to spend more on high-quality products. Vodka is a clear indication of the alcohol used and also has associations with a clean taste,” he says. “So, we’re confident this will broaden Drty’s appeal to people who aren’t so familiar with hard seltzer.” Not only that, Clements believes the use of the word ‘vodka’ better enables them to play in the RTD space, opening up possibilities to work with other spirits categories on seltzer products. Darty management has delivered against all its stated objectives, is high quality and has support from a high quality shareholder base. The underlying valuation for the Group and now the proposed offer of 101p, do not reflect these strengths, its strong cash flow profile or the future profit potential for Darty.Commenting on the launch, co-founder of Drty Matija Pisk, said: “We wanted to give UK consumers an alternative to high-sugar ciders and calorie-dense beers. Ultimately drinking alcohol is not a healthy activity, so the concept for the brand was born out of this contradiction – a drink that is clean but is still pretty Drty”. Studio Juice – the brand agency used by Camden Town Brewery, Moju, Karma Drinks and Momo Kombucha – were responsible for the refresh. Fnac is cash rich, c.€540m (Dec 2014) and with little commitment to a dividend policy we question why there is no cash component to the proposed offer. The attraction of Fnac paper, a very different business to Darty, is questionable for Darty shareholders in our view. The proposed offer for Darty significantly undervalues the group. The structure of the proposed offer does not deliver fair value to all shareholders. It also precludes Darty shareholders from benefiting in line with Fnac shareholders any future cost or revenue synergies. We see a higher price, a full or partial cash alternative and even possibly a dual London listing as some of the remedies for us to alter our view that this deal is not in the interests of all shareholders