Currys rejects higher takeover bid from Elliott

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UK electronics retailer Currys has rejected an improved bid from the US investment group Elliott Management, saying that the offer continued to “significantly undervalue the company and its future prospects”.

The new bid from Elliott was pitched at 67 pence a share in cash, up from its first proposal of 62p, the retailer said in a statement. Shares in Currys were up 2 per cent at 68.10p in afternoon trading before closing at 66.50p on Tuesday, valuing the company at £756.6mn.

Until Elliott showed an interest, Currys’ shares had languished on the London stock market. Following the first bid from Elliott, Chinese retailer also said it was considering an offer for the retailer.

Investec analyst Ben Hunt called Elliott’s offer “an interesting move”. He added: “Everyone has been quite clear where they [Elliott] would need to engage at, ‘bid up or go home’.” 

The slight drop in the share price on Tuesday afternoon was probably indicative of investor sentiment, Hunt said, reflecting the fact that “if that’s the best they can offer, one might wonder how serious they are about it”.

Formed through the 2014 merger of mobile phone retailer Carphone Warehouse and Dixons Retail, Currys has faced a tough market in the UK while its business in Scandinavia has struggled.

Last week, Currys’ largest investor, asset manager Redwheel, backed the board’s decision to reject Elliott’s first offer, saying the retailer was worth substantially more.

Analysts at Peel Hunt have previously said that they would “struggle to see the [Currys] board engaging on anything less than 80 pence”.

Currys said its board had on Monday unanimously rejected the revised proposal. Elliott has until 5pm on March 16 to raise its offer under UK takeover rules.

Elliott declined to comment. Sky News first reported that Elliott had increased its offer.

Currys chief executive Alex Baldock has been trying to push into higher-margin businesses, including repairs and maintenance of the electronic goods it sells. In November, Currys agreed to sell its Greek business, which accounted for almost 7 per cent of revenue, in a £175mn deal.

Elliott, which manages about $65bn in assets and invests in public and private markets, has some exposure to the UK high street already through its ownership of bookseller Waterstones.


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