Chinese tech giant pulls out of Currys race

Share price of electronics retailer tumbles as JD.com decides against making a bid for the company

CHINESE tech giant JD.com has walked away from making an offer to buy Currys, sending shares in the electronics retailer down as much as 10pc.

Investors sought to sell down shares after JD.com’s withdrawal as the prospect of a takeover recedes. The Chinese suitor had until Monday to make a formal offer for Currys, having said last month that it was in the “very preliminary stages” of evaluating a bid.

However, it said yesterday that “following careful consideration, it does not intend to make an offer”.

The announcement comes just days after US hedge fund Elliott also abandoned its effort to take Currys private after two successive bids were rebuffed by the retailer’s board.

No other company has been linked with a potential deal for the retailer.

JD.com’s withdrawal will dampen speculation over an imminent bidding war for the business, whose share price has surged in recent weeks.

Shares are up about 45pc since Elliott’s interest emerged earlier this year.

The Telegraph had initially revealed that JD.com had also declared an interest last month, as Currys held exploratory talks with the Chinese tech company.

JD.com was considering a bid amid a push to find new sources of growth as consumer spending slumps in China.

The Chinese retail behemoth, which runs an Amazon-style online “everything shop”, posted sales of almost $150bn (£119bn) last year.

Currys’ share price fell as much as 10pc yesterday, although it later eased to 5pc.

Elliott’s first offer of 62p a share valued Currys at £700m. After that bid was shunned, it came back last month with a £756m offer, but this was also rejected.

Analysts had previously suggested that both Elliott and JD.com would have to go much higher than Currys share price to seal a deal.

Peel Hunt said the board was unlikely to engage with any bid below 80p a share, which would value the company at about £900m.

Some of Currys’ largest investors have backed the board in its approach.

JO Hambro Capital, one of the company’s 10 biggest backers, said the offer was an example of the “absurdity” of the under-valued London market, amid concerns that companies are being made vulnerable to foreign takeovers. It said Currys should be worth far more than what investors have valued it at.

James Lowen and Clive Beagles, Hambro’s veteran fund managers, said an “acceptable offer” for the tech retailer would be closer to 100p per share, which would value the company at close to £1bn.

Analysts have suggested that Currys mobile network iD Mobile could be worth £500m alone. Its market capitalisation currently stands at £627m.

Currys’ annual sales stand at £9.5bn. However, it has struggled with a period of under performance in recent years, with shares about 60pc lower than they were in April 2021. In its latest trading update in January, Currys said it was expecting full-year adjusted profits to be between £105m and £115m.