Currys rejects greater £742 million bid from US company Elliot

The board of a UK electronics store claims that the deal from the owner of Waterstones undervalues the company.

Currys, the UK electrical retail business, has rejected an upgraded acquisition offer of £742 million from Elliott Advisors, a US investment group.

Elliott, which owns Waterstones book stores and controls the restaurant brand Wasabi, increased its offer to 67p per share from 62p in mid-February, Currys said in a statement to the London Stock Exchange.

The retailer stated that its board unanimously rejected the revised approach, which was originally reported by Sky News, “on the basis that it significantly undervalued the company and its future prospects”.

Following Elliott’s initial bid, Chinese online retailer JD.com announced that it was considering making an offer for Currys. Last week, Redwheel, the retailer’s largest investor, supported the board’s decision to reject Elliott’s first offer, noting that it was significantly higher.

Currys shares fell 1% after the business revealed it had rejected the second offer, giving it a market worth of approximately £746 million.

Elliott is renowned as an activist shareholder that has advocated for reform at drugmaker GSK and housebuilder Taylor Wimpey, as well as high-profile acquisitions such as Italian football club AC Milan, which it later sold. It has also bought several retail firms through its private equity investment arm.

Currys, which has had a challenging market, was formed by the 2014 merger of mobile phone retailer Carphone Warehouse and Dixons Retail, bringing household names Currys, PC World, and Carphone Warehouse under one roof. Henry Curry began the company in 1884 as a bicycle manufacturer before expanding into the sale of toys, gramophones, and radios when it went public on the London Stock Exchange in 1927. It is now a part of the FTSE 250 index for mid-sized firms.

Currys changed its strategy in 2021, merging its four brands (PC World, Dixons, and Carphone Warehouse) into a single master brand.

Currys employs around 15,000 people in the UK and operates about 300 locations. During the pandemic, it closed its 531 Carphone Warehouse locations in the UK, resulting in the loss of 2,900 employment. In November, the corporation agreed to sell its Greek business for £175 million.

Under UK takeover laws, Elliott must announce a formal intention to make a bid for Currys by 5 p.m. on March 16 or walk away.