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British electronics retailer Currys has rejected an improved offer from US investment group Elliott Management, saying the offer continues to “significantly undervalue the company and its future prospects”.
Elliott’s new offer was launched at 67 pence per share in cash, up from the first proposal of 62 pence, the retailer said in a statement. Shares in Currys rose 2% to 68.10p in afternoon trading before closing at 66.50p on Tuesday, valuing the company at £756.6m.
Until Elliott showed interest, Currys shares languished on the London stock market. After Elliott’s first bid, Chinese retailer JD.com also said it was considering a bid for the retailer.
Investec analyst Ben Hunt called Elliott’s offer “an interesting move.” He added: “Everyone was quite clear where they stood [Elliott] would need to commit to bidding or going home.”
The slight decline in the stock price Tuesday afternoon was likely indicative of investor sentiment, Hunt said, reflecting that “if this is the best they can offer, you might wonder how serious they are about it.”
Born from the 2014 merger of mobile phone retailer Carphone Warehouse and Dixons Retail, Currys has faced a tough market in the UK while its Scandinavian operations have struggled.
Last week, Currys’ biggest investor, asset manager Redwheel, backed the board’s decision to reject Elliott’s first offer, saying the retailer was worth substantially more.
Peel Hunt analysts previously said they would “struggle to see the [Currys] board committing to anything less than 80p.”
Currys said its board of directors unanimously rejected the revised proposal on Monday. Elliott has until 5pm on March 16 to increase its bid under UK takeover rules.
Elliott declined to comment. Sky News first reported that Elliott had upped his offer to her.
Curry CEO Alex Baldock has sought to move into higher-margin businesses, including repairs and maintenance of electronic products sold. In November, Currys agreed to sell its Greek operations, which accounted for almost 7% of revenue, in a £175m deal.
Elliott, which manages assets of around $65 billion and invests in public and private markets, already has some exposure to the British market through its ownership of Waterstones bookstore.