Steinhoff's Conforama mulls cash counterbid for Fnac target Darty

(Updates with valuation, share price)

PARIS, March 2 (Reuters) - South African furniture group Steinhoff's Conforama unit is considering a counterbid for Darty (Other OTC: KESAF - news) , Europe's No. 3 electrical goods retailer, competing with Fnac's agreed offer for the company.

Conforama said on Wednesday it had approached Darty about a 662 million pound ($925 million) cash bid. Darty, which has agreed a takeover by French books and music retailer Fnac, said it was considering the approach.

"There can be no certainty that any firm offer will be made by Conforama, nor as to the terms on which any firm offer might be made," Darty said in a statement.

A move by Conforama for Darty would step up the South African furniture group's expansion plans in Europe after parent

Steinhoff joined the battle to buy Britain's Home Retail (Other OTC: HMRLF - news) this month.

Fnac has already raised its offer for Darty once, aiming to create France's premier white goods retailer.

On Nov. 6, Fnac increased its bid to one Fnac share per 37 Darty shares held, equivalent to about 116 pence per share at the time and valuing Darty at about 615 million pounds ($859 million). The deal is due to be completed around mid-2016.

Discount furniture retailer Conforama said its proposed offer would be at 125 pence per share. Based on 529.55 million shares outstanding according to Reuters data that would value London-listed Darty at about 662 million pounds.

Darty shares jumped 9.5 percent on news of a possible counterbid to 126 pence per share, just above the proposed new offer price. Fnac shares fell 5.6 percent to 57.5 euros.

"This potential offer is 9 percent higher than the current Fnac offer, is cleaner being all in cash and represents a better, though not full, valuation for Darty shareholders," Liberum analysts said in a note.

Darty earns 70 percent of its revenue in France but has 400 stores across Europe and competes with Media-Saturn, owned by Germany's Metro (Other OTC: MTRAF - news) , and with Britain's Dixons. Conforama, like Darty and Fnac, has a strong presence in French high streets and retail parks. ($1 = 0.7158 pounds) (Reporting by Andrew Callus; Editing by James Regan and Susan Fenton)