* Steinhoff pays "strategic premium" for Mattress Firm -analyst
* Deal gives Steinhoff access to U.S. for first time
* Steinhoff has capacity to absorb Mattress Firm, debt -Moody's
* Shares rise in Frankfurt, Johannesburg (Adds Moody's comment in last two paragraphs)
By Tiisetso Motsoeneng
JOHANNESBURG, Aug 8 (Reuters) - Steinhoff's $3.8 billion purchase of debt-laden Mattress Firm, the largest U.S. specialty bedding vendor, will helpcut its exposure to a weak home market and gain a big presencein the world's biggest retail market.
The deal, announced on Sunday, will create the world'slargest mattress distributor and takes the $23 billion SouthAfrican retailer across the Atlantic for the first time.
Steinhoff will pay $64 per share, a 115 percent premium toMattress Firm's Friday close. The price includes $1.4 billiondebt.
"On the one hand this looks like a full price for Steinhoffto pay," said Richard Chamberlain, an analyst at RBC Europe inLondon. "However, we think Steinhoff is paying a strategicpremium to allow it to enter the US market with an industryleading partner."
Steinhoff, which sells beds and cupboards to less affluentshoppers, has been on an acquisition spree to offset exposure toa deteriorating home market with safer assets in markets such asEurope, where it already makes more than two-thirds of its 9.8billion euros ($11 billion) of annual sales.
A month ago it agreed to buy Britain's Poundland for $800 million following its failure to secure France's DartyPlc and Britain's Home Retail earlier thisyear.
Shares in Steinhoff, which moved its primary listing toFrankfurt in December to access deeper capital markets, closedup 1.6 percent in Frankfurt and 0.9 percent in Johannesburg.
Steinhoff, which counts South African retail veteran ChristoWiese as board member and shareholder, would pay 60 percent morethan what Mattress Firm should be trading at based on its mostlikely earnings growth trajectory, according to Thomson ReutersStarMine.
StarMine's intrinsic valuation model, which uses a blend ofanalysts estimates and its own models, rates Mattress Firm share price at around $40, based on an expected 7.7 percentfive-year annual compounded growth.
"While this seems an excessive price, and it is, theMattress Firm's stock is trading today at the same price as inJanuary 2012," said Sasha Naryshkine, a fund manager at Vestactin Johannesburg, which own shares in Steinhoff.
Mattress Firm shares were up more than 114 percent at$63.70. They had lost more than 50 percent in value over thelast 12 months as weak demand and changes related toamortization of its trade name weighed on itsresults.
The U.S. company has also been under pressure as theimproving quality of mattresses encourage consumers to keep themfor longer.
But the Johannesburg-based company has a reputation forbuying underperforming companies that can benefit from its wideglobal network to source goods at lower prices.
"Are they too aggressive? There's a strong case for that butthen again it makes all the commercial sense to move quickly andlock in financing deals at low interest rates," said one top tenshareholder, who declined to be named.
Steinhoff, rated Baa3 with a stable outlook by ratingsagency Moody's, said it intended to finance the acquisitionthrough a combination of bank and bridge loans.
Moody's, which reckons Steinhoff has close to 2 billioneuros in surplus cash, on Monday affirmed its rating and outlookon the company's debt.
"The affirmations with a stable outlook reflect our viewthat Steinhoff's credit profile has the capacity to absorbMattress Firm and associated acquisition debt," said DouglasRowlings, Moody's lead analyst for the company.($1 = 0.9029 euros)
(Editing by Susan Thomas)
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