19 February 2024 , 11:21
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Shares in Currys have rocketed as the electricals retailer could become the target of a bidding war after attracting interest from two potential buyers.
The share price of the FTSE 250-listed business rose by about a third in early Monday trading after it turned down a takeover bid worth around £700 million from the owner of Waterstones, Elliott Advisors. Chinese retail giant JD.com is also considering a possible deal to buy the business.
Currys said the offer from US private equity giant Elliott was "unsolicited" and that the board felt it "significantly undervalued the company and its future prospects". The proposal valued the business at 62p per share, which would have been higher than the firm's current share price valuation.
However, Currys' board unanimously rejected the offer. Elliott took control of bookseller Waterstones in 2018, buying a majority stake from Russian billionaire Alexander Mamut who saved the chain from near-collapse in 2011.
Meanwhile, JD.com said it was "in the very preliminary stages" of evaluating a deal which could include an offer for the entire share capital of Currys. JD.com claims to be China's biggest online retailer, with a marketplace-style shop that sells everything from electronics and furniture to food and household essentials.
Shop prices 'are yet to peak and will remain high' as inflation hits new heights
The company stressed that there is no certainty that an offer will be made. Currys made a deal last year to sell its Greek and Cypriot branch for 200 million euro (£171 million), as it focuses on its larger UK and Ireland business, and looks to turn around its loss-making Nordics division.
The retailer said sales had been slow over the crucial Christmas period because some customers were still holding back on making more expensive purchases as the cost-of-living crisis bites. But it said it was expecting to make an adjusted pre-tax profit of up to £115 million this year, higher than previous expectations, after making cost savings across the group.