Currys Takeover by US Firm Elliot Hits a Roadblock
US investment firm Elliott Advisors has abandoned its pursuit of a takeover bid for Currys after facing multiple rejections from the retailer’s board. Initially proposing an offer valuing Currys at £700 million, Elliott increased the bid to £757 million. However, Currys dismissed the offers, citing that they “significantly undervalued” the business. Despite Elliott’s attempts to engage with Currys’ board, the investment firm announced on Monday that it would not make an improved offer, stating it was not in an informed position based on publicly available information.
With over 800 global stores and 28,000 employees, Currys operates approximately 300 stores in the UK, employing 15,000 staff. Elliott’s rejection comes amid challenging times for retailers, with the rising cost of living leading consumers to cut back on spending. Currys reported a 3% decline in underlying sales during the crucial Christmas trading period. Nevertheless, the company raised its profit forecast for the year, citing cost cuts and improved profit margins on certain services.
Elliott Advisors, which also owns UK bookseller Waterstones, faced a setback as Currys’ board remained unresponsive to its overtures. Following the withdrawal of Elliott’s takeover interest, Currys’ share price experienced an 8% decline in early trading on Monday. The company’s share price has attracted investor attention, as analysts note its seemingly low valuation relative to market share and profitability.
While Elliott steps back, there is still potential for a bid from China’s JD.com, which expressed interest in acquiring Currys last month. JD.com stated it was in the preliminary stages of evaluating a possible bid. According to UK takeover rules, JD.com has until March 18 to either submit a formal offer or withdraw from the deal. The outcome of JD.com’s decision will play a crucial role in determining the future of Currys and its position within the competitive retail landscape.
