Britain’s Currys said it rejected an improved 757 million pound ($951 million) bid from U.S. investor Elliott Advisors, in the latest twist in a potential takeover battle with a rival Chinese suitor for the electricals retailer.
China-based online giant JD.com has said it is also considering an offer for Currys, but it has yet to show its cards.
Currys said on Tuesday that Elliott’s second approach came in at 67 pence, compared to the U.S. investor’s initial 62 pence bid, but the company said that was not enough.
“The board of Currys considered the Second Elliott Proposal, together with its financial advisers, and concluded that it significantly undervalued the Company and its future prospects,” the company said in a statement.
Shares in Currys traded up 2% at 68 pence in early afternoon trading.
Analysts have said the low valuation of Currys triggered interest in the company. Peel Hunt said that it believed it would take an offer of over 80 pence per share for the company’s board to engage.
While Currys, which sells fridges, washing machines, computers and other electrical and electronic equipment in Britain, Ireland, Sweden, Norway, Denmark and Finland, has struggled to grow over the last two years due to the squeeze on consumer incomes, the company argues that its prospects are bright.
In January, it forecast annual profit ahead of market expectations as it benefits from improving consumer confidence and a turnaround in its Nordics business.
China’s JD.com is keen on the store and warehouse network of Currys to help it expand in the UK and Europe to counter weak demand in its domestic market, but it has not made any statement since Feb. 19 when it confirmed it was in the early stages of evaluating a deal.
Britain’s takeover regulator has set March 16 as a deadline for the bidders to make a firm offer for Currys or walk away.
Elliott, which since 2018 has owned Britain’s Waterstones bookshop chain, declined to comment on its higher bid.
Currys was one of the winners of the pandemic, as consumers brought forward purchases of electronics and home appliances at a time when they could not spend on holidays or recreation, pushing up its shares to 159 pence in April 2021.
But they have fallen since and were trading at around 47 pence on Feb. 16, the day before news of the takeover interest broke.
Source: Reuters.com