Currys, the renowned electrical goods retailer, has recently turned down a takeover offer from US investment firm Elliott. With over 800 stores worldwide and a workforce of 28,000 employees, Currys stated that the offer valued the company at approximately £700 million. However, the proposal was deemed to “significantly undervalue” the business, leading to its rejection.
Elliott is known for being an activist investor, meaning it seeks out companies to take over and implement changes in their operations. In 2018, the firm acquired Waterstones, a prominent UK bookshop chain, for an undisclosed sum. Now, Elliott is contemplating whether or not to make a formal offer for Currys. According to UK takeover regulations, it has until March 16th to make a decision.
Currys, like many other High Street businesses, has been grappling with declining sales as consumers tighten their spending habits. During the crucial Christmas trading period, the company reported a 3% decrease in like-for-like sales, which excludes the impact of store openings and closures. Despite this setback, Currys managed to raise its profit forecast for the year by implementing cost-cutting measures.
Nevertheless, Currys’ shares have plummeted by over a third in the past year, closing at 47.08p on Friday and valuing the business at around £534 million. In response to Elliott’s proposal, Currys released a statement affirming that its board had thoroughly evaluated the “unsolicited” offer and concluded that it significantly undervalued the company and its future prospects.
In addition to its stores in the UK and Ireland, Currys operates under the Elkjøp brand in the Nordic region. Last November, the company announced a deal to sell its Greek business, which trades under the Kotsovolos brand, for £175 million.
Currys’ rejection of Elliott’s takeover offer highlights the company’s determination to uphold its value and future potential. As the retail industry continues to face challenges, Currys remains focused on navigating the changing landscape and maintaining its position as a leading electrical goods retailer.
