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Elliott Management has abandoned an attempt to buy UK electronics retailer Currys, saying that “multiple” efforts to engage with the company’s board had been rebuffed.
The US investment group, best known as a fearsome activist investor targeting much larger companies, initially offered to buy Currys for 62p a share before raising that to 67p at the end of February.
Currys said the proposals undervalued the group, a position that was backed by its largest shareholder Redwheel, a UK-based asset manager.
“Both offers were at a level which significantly undervalued the company,” said a person familiar with the matter. “It was down to [Elliott] to make an offer at an acceptable level”.
In a statement on Monday, Elliott said the unwillingness of the high street retailer to engage meant it was “not in an informed position to make an improved offer for Currys on the basis of the public information available to it”.
Shares in Currys fell more than 10 per cent to 57p at the start of trading in London.
Formed from the 2014 merger of mobile phone retailer Carphone Warehouse and Dixons Retail, Currys has faced a tough market in the UK while its business in Scandinavia has struggled.
Until the takeover interest from Elliott, Currys shares had been in a multiyear decline. The added pressure of the cost of living crisis, which weighed on demand for electronics, sent the retailer’s shares down 40 per cent over the past two years.
In July Currys scrapped its final dividend and reported it had swung to an annual loss before tax of £450mn, compared with a profit of £126mn the previous year, driven by a £511mn non-cash charge relating to the 2014 merger.
Currys’ chief executive Alex Baldock, who joined in 2018, has been steering the company towards higher-margin businesses such as repairs and maintenance of the electronic goods it sells.
In November last year, Currys agreed to sell its Greek business, which accounted for almost 7 per cent of revenue, in a £175mn deal that it said would allow the company to strengthen its balance sheet and focus on bigger markets of the UK and Ireland, and Nordics.
Analysts at UK broker Peel Hunt have said that an offer would need to be pitched at about 80p a share or higher for the board of Currys to seriously entertain it.
Last month, Chinese ecommerce company JD.com said it was considering a bid for Currys after Elliott’s initial approach emerged.
