5th Mar 2024 14:29
(Alliance News) - Currys PLC should hold out for an offer of around GBP1 billion amid the tech retailer's ongoing takeover saga, an investor in the firm has said.
JOHCM (JO Hambro Capital Management) UK Equity Income fund, a top 10 shareholder in the company, said an offer between 80p and 100p would be "acceptable".
A 90 pence offer would value the business at around GBP1 billion, the institutional investor said.
It comes a week after Currys rejected a higher GBP757 million takeover approach from the US owner of Waterstones Booksellers Ltd.
Activist investor Elliott Investment Management LP had made a second proposed offer worth 67p a share, up from its initial unsuccessful 62p a share approach on February 19.
The second move was then also rebuffed, with the firm's board claiming it "significantly undervalued the company and its future prospects".
Elliott has until next week Saturday to make a firm offer for Currys or walk away under City Takeover Panel rules.
Chinese retail company JD.com Inc has also said it was considering a possible deal to buy Currys last month.
On Tuesday, JOHCM UK equity income fund said it believed the value of the deal compared to the size of the retailer's sales showed the current "absurdity" of the UK stock market.
Clive Beagles and James Lowen, senior fund managers at the fund, said: "Currys' core business, with leadership positions in both online and offline markets across the Nordics and the UK, generates approximately GBP9.5 billion in sales.
"This clearly shows the absurdity of UK stock-market valuations, which we have discussed extensively in these reports over the last two years.
"Our normalised earnings per share for Curry's is 12p, suggesting an exit per earnings of 8x at the top end of the range.
"Our range reflects some pragmatism, as we can rotate the value received into other very cheap stocks."
Currys declined to comment.
Currys shares rose 0.4% on Tuesday afternoon to 66.30 pence per share in London.
By Henry Saker-Clark, PA Deputy Business Editor
Press Association: Finance
source: PA
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