Chinese ecommerce platform JD.com has recently confirmed that it is exploring the possibility of acquiring Currys, a major electrical retailer in the UK. This announcement has sent shares of Currys soaring, as it opens the door for a potential bidding war after the rejection of a £700 million (USD 883 million) offer from U.S.-based investor Elliot Advisors.
The move by JD.com comes in response to a report in The Times newspaper, suggesting that Elliot Advisors is considering a higher bid for Currys. The retailer officially rejected Elliot’s offer of 62 pence per share, asserting that it significantly undervalues the company. This rejection prompted a significant surge in Currys’ shares, reaching as high as 37 per cent during Monday’s market opening.
JD.com, in its statement, clarified that it is in the preliminary stages of evaluating a possible transaction, including a cash offer for the entire issued share capital of Currys. The confirmation follows reports from sources cited by the Telegraph, stating that representatives from JD.com had engaged in exploratory talks with Currys in recent weeks.
Currys, previously operating under the Dixons and Carphone Warehouse brands in the UK, has faced challenges in growing profits amid consumer income constraints due to high inflation. Over the last two years, the company’s shares had experienced a 54 per cent loss in value. Last year, Currys announced the sale of its Greek unit for £156 million.
A potential takeover of Currys would be of particular interest to Mike Ashley’s Frasers Group, which has accumulated a stake of over 11 per cent in Currys, partly through financial instruments. The retailer declined to comment on JD.com’s statement, while Elliot Advisors, which already owns another British retailer, Waterstones bookshops, has yet to respond to requests for comment.
Under UK takeover rules, Elliot Advisors has until 1700 GMT on March 16 to either make a firm offer for Currys or announce its decision to walk away, setting the stage for an intriguing and potentially competitive acquisition process in the coming weeks.
