Private equity firm Elliott Investment Management is walking away from a potential takeover of Currys which has more than a dozen stores in Ireland, causing the electronics retailer’s shares to plunge and easing the way for a possible bid from China’s JD.com.
The US firm said “following multiple attempts to engage with Currys’ board, all of which were rejected,” it did not have the necessary information to make a third bid.
Shares fell 11 per cent in London to around 57 pence. The stock was trading at around 47 pence before news of the first offer broke last month.
Elliott had made two approaches at 62 pence and 67 pence a share in recent weeks, valuing the chain at as much as £760 million (€892 million), but both were turned down by Currys which has said the company is worth substantially more.
The retailer’s rejection of Elliott’s approaches was backed by its shareholder, Redwheel, which also said Currys was worth “substantially more.” Analysts at Peel Hunt previously said they could not see the board engaging on any bid less than 80 pence a share.
Elliott’s withdrawal could encourage Chinese ecommerce giant JD.com, which has said it’s considering a bid. No offer from JD.com has materialised yet; under UK takeover rules JD.com has until March 18 to announce a firm intention to make an offer or walk away.
Elliott cannot now make another approach for Currys for at least six months, unless it gets approval from the board or a rival offer materialises.
Currys may now have to justify its improved share price, according to Bloomberg Intelligence retail analyst Charles Allen, although he said it remains cheaper than peers.
A spokesperson for Currys declined to comment.
The retailer is attracting interest after losing almost 60 per cent of its value in three years as shoppers cut back on pricey electronics during Britain’s cost-of-living crisis.
Currys operates more than 800 stores across eight countries, selling items such as vacuum cleaners, laptops and iPhones, mainly to British consumers. – Bloomberg
