Currys rebuffs 2nd offer as bid battle heats up
CURRYS has rebuffed a second takeover offer as American and Chinese predators circle. The electricals retailer rejected a bid of £757 m from US activist investor elliott.
The 67p-a-share offer was an improvement on elliott’s previous proposal of 62 p a share, or £700 m which was dismissed by the Currys board earlier this month.
The interest from the Americans comes as Chinese online shopping giant JD.com weighs up making an offer of its own.
Currys shares edged down 0.4 pc, or 0.25 p, to 66.5 p amid disappointment the latest offer was not higher. But they remain up more than 40 pc since the bidding war broke out 11 days ago.
Analysts have suggested that a bid of 80 p a share, or £900 m, will be required to win the backing of the Currys board.
‘elliott has made its intentions towards British retailer Currys crystal clear,’ said analysts at broker AJ Bell. ‘It’s put more skin in the game, though nowhere near as much as the company’s board will need to see if it is to properly engage with its suitor.
‘UK plc still looks mighty cheap. But this particular move may be one that nudges JD to show its hand and could result in a rather tasty bidding war that ultimately sends the price up to the kind of level you might expect for a profitable company coming out of a downturn.’
Currys said yesterday its board unanimously rejected the latest offer as it ‘significantly undervalued the company and its future prospects’.
Under takeover rules, elliott has a deadline of March 16 to make a bid or walk away while JD.com has until March 18. elliott declined to comment last night, leaving it unclear as to whether it would come back to the negotiating table with a third offer.
The group also owns book store Waterstones and last year explored taking over fashion firm Reiss and ailing high Street brand The Body Shop.
Currys – which is the product of the merger ten years ago of Currys PC World with Carphone Warehouse – has 28,000 employees and more than 800 stores across eight countries.
But the company has had a turbulent few years, racking up a £450 m loss as revenues fell 6pc to £9.5 bn in its latest financial year to April 2023.
Chief executive Alex Baldock has admitted the business is struggling in the face of increased costs including wages and business rates.
Shareholders who may benefit from a bidding war include Sports Direct tycoon Mike Ashley – whose Frasers Group owns a chunk of the retailer already – plus Carphone Warehouse co-founder David Ross.
‘UK plc still looks mighty cheap’