Currys PLC said it rebuffed a takeover attempt from U.S. activist investor Elliott Investment Management LP, believing the bid undervalues the electricals retailer. Currys shares are down a third in the past year but its board said the Elliott deal bid undervalued the company.
UK electronics retailer Currys has rejected an unsolicited bid from U.S. investment group Elliott Management, saying it significantly undervalued the company.
Currys and Elliott deal
Currys said on Saturday afternoon that the board had on Friday unanimously rejected a taveover proposal of 62 pence per share a roughly 32 per cent premium to its latest price, valuing the company at about £700mn.
Elliott Management said earlier on Saturday that it was considering making a cash offer for Currys.
Elliott said there was no certainty it would make an offer for Currys. Under UK takeover regulations, it has until March 16 to table a firm offer or walk away.
Currys said there could be no certainty that an offer would be made, nor what terms it might involve.
Elliott’s portfolio
Currys, which has a market capitalization topping half a billion pounds, would mark a significant target for Elliott. Elliott already has a substantial private equity portfolio that includes the UK bookseller Waterstones and a controlling stake in food chain Wasabi.
Currys presence in UK
The electronics retailer has a strong market position in the UK and the Nordic region. In November it agreed to sell its Greek business in a £175mn deal that is expected to strengthen its balance sheet.
Chief executive Alex Baldock, who joined in 2018, has been spearheading a turnaround of the chain, which sells televisions, laptops and other electrical goods online and through 815 stores in eight countries.
During the pandemic it closed all 531 Carphone Warehouse stores it owned in the UK, with the loss of 2,900 jobs, in an effort to make its struggling mobile phone business profitable.
Elliott’s activist approach
The U.S. investor Elliott manages around $65bn in assets and invests in public and private markets. The hedge fund and private equity group is well known for taking an activist approach to investing, engaging in boardroom battles to influence the future direction of the companies in which it has a stake.
Elliott has had an active start to the year. Earlier this month it called for Japanese property group Mitsui Fudosan to buy back ¥1tn ($6.7bn) in shares and for the firm to sell its stake in Tokyo Disneyland operating company Oriental Land, in a move first reported by the Financial Times.
Currys stock update
Its shares, which are down 36 per cent in the past year, traded roughly flat to close at around 47 pence per share on Friday.
