10th Oct 2013 12:07
LONDON (Alliance News) - Dixons Retail PLC Thursday said it has stuck a deal to merge its loss-making Italian businessUnieuro SpA with a company controlled by private equity company Rhone Capital, and will pay EUR25 million in cash as part of the deal.
Dixons, which recently disposed of businesses in Turkey and in France as it tries to focus on main markets and its most profitable businesses, said it will own just 15% of the new joint venture, with Rhone Capital's SGM Distribuzione, which trades as Marco Polo in Italy, becoming the controlling shareholder with an 85% stake.
In a statement, the electronics retailer said it will leave the business with EUR25 million in cash and will invest up to EUR10 million in a loan note.
Unieuro generated a pretax loss of GBP4.1 million on sales of GBP516 million in the year to April. It had gross assets of GBP209.2 million.
"The transaction is expected to be accretive to underlying earnings for Dixons Retail in the current financial year," the company said in a statement.
Dixons Retail shares were up 4.4% at 46.05 pence Thursday afternoon, one of the top gainers on the FTSE 250.
By Samuel Agini; [email protected]; @samuelagini
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