Currys Takeover Plans Thwarted as US Firm Elliot Backs Out
US investment firm Elliott Advisors has decided to abandon its pursuit of a takeover bid for Currys, a leading electricals chain, after facing multiple rejections from the retailer’s board. Initially proposing a £700 million offer, Elliott raised it to £757 million, only to be turned down by Currys, which deemed the offers as “significantly undervaluing” the business.
Currys, boasting over 800 global stores and a workforce of 28,000, operates around 300 stores with 15,000 employees in the UK. Despite the rejection from Elliott, there’s still potential for a bid from China’s JD.com, which expressed its contemplation of an offer for Currys last month.
On Monday, Elliott, also the owner of UK bookseller Waterstones, revealed that it had made efforts to engage with Currys’ board but decided to withdraw, citing an inability to make an informed, improved offer based on publicly available information.
The challenging economic landscape, marked by a rise in the cost of living, has adversely affected retailers like Currys, with underlying sales dropping by 3% during the crucial Christmas trading period. However, the company revised its profit forecast upwards for the year, attributing the improvement to cost-cutting measures and higher profit margins on certain services.
Despite the decline in sales, analysts find Currys attractive to investors due to its market share and profitability, which may not be adequately reflected in its current share price. In response to the news of Elliott Advisors discontinuing its takeover interest, Currys’ share price experienced an 8% decline in early Monday trading.
JD.com, the Chinese e-commerce giant, remains in the picture with its potential bid for Currys. The company disclosed last month that it was in the early stages of evaluating the possibility of a bid. As per UK takeover rules, JD.com has until March 18 to either make a formal offer or withdraw from the deal. The unfolding developments indicate a dynamic situation for Currys and its potential suitors in the ever-evolving landscape of corporate acquisitions.
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