- JD.com said it was in the “very preliminary stages” of considering a takeover bid.
- Founded in 2004, JD.com is one of China’s top two e-commerce retailers.
- Currys rejected a £700m bid from Elliott Advisers last week
Currys shares soared on Monday morning after Chinese online retail giant JD.com confirmed it was considering a strategy for the electrical goods retailer.
JD.com said it was in the “very preliminary stages” of considering a takeover bid for the company, which operates more than 800 stores and employs about 28,000 people in eight countries.
The Chinese firm’s move for Currys raises speculation about a bidding war between the Beijing-based firm and private equity group Elliott Advisors.
Currys last week rejected a takeover bid worth around £700m from Elliott Advisers, saying the 62p per share offer “significantly undervalued the company and its future prospects”.
Rise: Currys shares soared on Monday morning after Chinese online retail giant JD.com confirmed it was considering an approach to the electrical goods retailer.
curry stocks They soared 34.7 percent to 63.4 pence, making them the biggest gainers by far on London’s FTSE 250 index.
Founded in 2004, JD.com is one of China’s top two e-commerce retailers along with AliBaba-owned TMall, and reported nearly $150 billion in revenue last year.
Rival Elliott’s proposal would have represented a premium of around 30 per cent to Currys’ closing share price on Friday.
Sky News reported on Sunday that a prominent Currys shareholder was pressuring the company to accept a minimum price of £800 million.
Waterstones owner Elliott is known for taking large stakes in struggling companies and aggressively pushing for changes to try to boost returns and share prices.
Last month, Currys revealed its like-for-like revenue fell 3 per cent in the ten weeks ending January 6 following slow trading across all markets.
In recent years, the company’s sales have been severely affected by cost of living pressures and the end of Covid-related restrictions which affected demand for goods such as televisions and computers.
Trading has been especially weak in the Nordic region as Currys keeps prices stable while rivals heavily discount products to get rid of excess stock.
Amid a challenging outlook for consumer spending, the company canceled its final dividend last summer to protect its balance sheet.
Currys has since agreed to sell its Greek and Cypriot business, Kotsovolos, for €200m (£175m) to Public Power Corporation, Greece’s largest power generation provider.
The company intends to use the proceeds from the sale to reduce debt, but also believes the sale would create “greater flexibility” for future investments and returns for shareholders.
Russ Mould, investment director at AJ Bell, said: ‘Currys is the last major UK electrical chain with a physical store, making it a unique asset on the national stock market. In theory, that status deserves a premium takeout price.
‘However, in this case, his unique status is because he is the last man standing in an industry that has migrated to the digital world. Maintaining this status requires a lot of hard work rather than Currys having a huge advantage over his peers.”