China’s JD.com becomes second suitor to walk away from takeover bid for Currys

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By Imelda Cotton - 
Currys LSE CURY JD.com Jingdong takeover bid

Chinese e-commerce giant JD.com (also known as Jingdong) has walked away from a takeover tussle for British appliance and electronics chain Currys plc (LSE: CURY).

In a brief statement released last week, the company said it would no longer pursue an offer for the High Street brand, less than one month after entering the race.

It follows a withdrawn takeover bid by US-based suitor Elliott Investment Management after multiple offers, including a £757 million proposal, had “repeatedly been rejected”.

Elliott’s initial bid came in at £0.62 per share while its second approach was pitched at a more attractive £0.67, but Currys said it was not high enough.

Elliott said it did not have enough detail to make an informed bid.

Meanwhile, Currys’ board was firm in its decision.

“The board considered the second Elliott proposal, together with its financial advisers, and concluded that it significantly undervalued the company and its future prospects,” it said in a statement.

Clearing the way

Elliott’s departure cleared the way for JD.com to snap up Currys.

Just last month, China’s largest online retailer said it was evaluating a possible transaction which may have included a cash offer for Currys’ entire issued share capital.

It has since confirmed that it will walk away from those plans but has reserved the right to make or participate in a new offer within the next six months.

Bright prospects

While Currys has struggled to grow over the last two years due to a squeeze on consumer incomes, the company argues that its prospects are bright.

In January, it forecast a full-year profit ahead of market expectations of £104 million after stable gross margins and cost savings offset a fall in underlying sales over the Christmas period.

The company — which sells whitegoods, electrical and electronic equipment to customers in Britain, Ireland, Sweden, Norway, Denmark and Finland — is expecting an adjusted profit before tax of around £115 million.

In November, Currys sold Greece-based Kotsovolos electrical retailer to the nation’s power utility Public Power Corporation in a £175 million deal.

The company said it would use the proceeds — expected to be about £156 million after costs — to cut debt and reduce the accounting net deficit of its pension fund.

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