US investor Elliott ends bid to buy UK retailer Currys

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US investor Elliott ends bid to buy UK retailer Currys

U.S. investment powerhouse Elliott Advisors announced today its decision to terminate any further attempts to acquire Currys PLC, the British electrical retail giant, after its persistent bid of £760 million ($976 million) was met with firm opposition from Currys’ board in February.

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US investor Elliott ends bid to buy UK retailer Currys : Elliott’s Withdrawal

Elliott Advisors (UK) Ltd., the British arm of the investment firm, conveyed its stance, stating that it “does not intend to make an offer for Currys.” The decision comes after Elliott’s numerous efforts to engage with Currys’ board were summarily rebuffed, leaving the investor unable to craft an improved offer based on the publicly available information.

US investor Elliott ends bid to buy UK retailer Currys : Shares in Turmoil

Following Elliott’s announcement, shares in Currys took a staggering hit, plummeting by 7.60% to 59.60 pence on Monday morning from their Friday close of 64.50 pence. The market’s response underscores the uncertainty surrounding Currys’ future amid the failed acquisition bid.

Elliott’s Offer Rejected

Elliott’s initial bid, valuing Currys at approximately £700 million with an offer price of 62 pence per share, was flatly rejected by Currys’ board on February 19. Despite Elliott’s subsequent increase of its offer to 67 pence per share, totaling around £760 million, Currys remained steadfast in its rejection, deeming the proposal as significantly undervaluing the company.

Investor Strategy Unveiled

Russ Mould, investment director at AJ Bell, shed light on Elliott’s modus operandi, stating that investors like Elliott aim to secure acquisitions at the lowest possible price to drive transformative changes or unlock hidden value. Currys’ swift dismissal of Elliott’s bids reflects its reluctance to entertain potential restructuring or upheaval.

Potential Suitor Emerges

In the wake of Elliott’s withdrawal, JD.com Inc., a prominent Chinese online retailer, hinted at its interest in Currys with preliminary discussions regarding a cash offer. JD.com’s intentions remain veiled in ambiguity as the retailer approaches the March 18 deadline to either formalize its bid for Currys or retract its interest.

US investor Elliott ends bid to buy UK retailer Currys : Struggles Amidst Pandemic

Currys, forged in 2014 through the merger of Dixons Retail and Carphone Warehouse Group, has grappled with restoring shareholder value to pre-COVID-19 levels. The retail giant’s predicament underscores the challenges faced by traditional brick-and-mortar establishments amidst the evolving retail landscape.

Financial Advisory Landscape

Jefferies International Ltd. stands as Elliott’s financial adviser, while Goldman Sachs International and Citigroup Global Markets Ltd. assume advisory roles for JD.com and Currys, respectively.

US investor Elliott ends bid to buy UK retailer Currys : The Future Uncertain

As Currys navigates the aftermath of Elliott’s retreat and awaits JD.com’s next move, the retailer finds itself at a crossroads, grappling with the complexities of revitalizing its business in a rapidly evolving market landscape.