Elliott Investment Management, a private equity company, has withdrawn from potentially acquiring Currys – a retailer with numerous outlets in Ireland. This has brought about a drop in Currys’ share prices and made room for the potential bidding by JD.com, a Chinese firm. Despite multiple unsuccessful attempts to establish a dialogue with Currys’ board for information, the US firm was unable to finalise a third bid.
Currys’ stock observed an 11 per cent decrease in London, hitting 57 pence per share, whereas it was trading close to 47 pence prior to the initial offer breaking news last month. Previously, Elliott had proposed two bids at 62 pence and 67 pence per share, estimating the chain’s worth up to £760 million (€892 million). These bids, however, were rebuffed by Currys, which argues that the company’s worth is significantly higher.
The rejection of Elliott’s proposals by Currys received support from Redwheel, one of its shareholders. It echoed Currys’ claim that the firm is worth “substantially more”. Analysts from Peel Hunt also previously opined that the firm likely won’t consider any bid below 80 pence per share.
JD.com, a Chinese e-commerce behemoth, might now feel encouraged to bid, given Elliot’s retreat. As per the UK takeover guidelines, JD.com has a timeline until 18 March to either announce a solid intention to bid or back off. For at least the next six months, Elliott cannot advance a renewed approach for Currys unless it obtains the board’s consent or a competitive offer is presented.
Charles Allen, a retail analyst from Bloomberg Intelligence, suggested that Currys might now need to substantiate its enhanced share price, though he mentioned it’s still less costly compared to its contemporaries. Currys declined to comment on the situation.
Alongside the cost-of-living crisis in Britain leading people to reduce their expenditure on expensive electronics, the retailer has lost around 60 per cent of its value in three years. This has drawn attention to the company. Currys runs over 800 stores in eight countries, primarily catering to British consumers with products like vacuum cleaners, laptops, and iPhones.