Elliott confirms bid approach for UK retailer Currys

19th Feb 2024 07:02

(Sharecast News) - Shares in Currys surged more than 35% on Monday after US private equity firm Elliott Advisors and China ecommerce giant JD.com on Monday confirmed they were considering separate bids for struggling British electrical retailer.

Elliott, which bought the UK bookstore chain Waterstones in 2018, said in a statement there was "no certainty that an offer will be made for Currys" or the terms on which any bid might be made.

Currys on Sunday rejected Elliott's 62p-a-share approach, saying its £700m proposal "significantly undervalued" the chain and its future prospects.

Elliott has until March 16 to make a firm bid. Meanwhile, Beijing-based JD.com also confirmed it was in the "very preliminary stages of evaluating a possible transaction that may include a cash offer for the entire issued share capital of Currys" and will need to show its hand by March 18.

Last month Currys lifted full-year profit forecasts despite reporting a drop in sales as consumers cut back on discretionary spending amid high inflation and stagnant wage growth.

In an update for the 10 weeks to 6 January, the retailer said group sales declined by 4%, with those in the UK and Ireland down 3%, while the international segment saw a 6% fall. The Nordics and Greece fell 6% and 4%, respectively.

It has more than 800 stores around the world and employs 28,000 people. In the UK, it operates about 300 stores with 15,000 staff.

The company now expects adjusted pre-tax profit for the year of between £105m - £115m, above consensus expectations of £104m.

Reporting by Frank Prenesti for Sharecast.com