Daily Telegraph article19 Feb 2024 21:25
Meanwhile, JD.com is likely to see a Currys takeover as an opportunity to boost growth as the economy in its home market China slows. The company has established its status as China’s largest retailer, raking in revenues of almost $150bn (£119bn) last year with its Amazon-style offering.
One factor that will complicate any potential takeover is Mike Ashley’s Frasers Group, which has built an 11pc stake in Currys and is also a shareholder in rival AO World.
This has sparked speculation that the Sports Direct tycoon could look to create a new combined player in the consumer electronics market. However, analysts believe he is unlikely to make a takeover bid and may be more interested in inking partnerships with his own retail empire.
More broadly, the swoop on Currys comes amid a surge in interest in British companies from opportunistic foreign buyers.
A combination of the weaker pound, a stagnating UK economy and the impact of Brexit has left share prices bombed out and companies vulnerable to bids.
Data from Peel Hunt shows there were 35 bids for UK companies worth over £100m in 2023, while companies worth a combined £17bn abandoned the London stock market.
Black describes this as a “failure of equity capital markets”. Yet where some see failure, others see opportunity.
For analysts at Peel Hunt, retail is a particularly overlooked sector and Currys could be the “first of many” takeover deals this year.
The stock broker has compiled a hit list of likely targets. They include some of Britain’s best-known brands, such as Marks & Spencer, DFS, Halfords and Dr Martens. All trade on low price-to-earnings ratios, making them attractive to bidders.
Peel Hunt said: “With interest rates having peaked, the outlook for M&A from both private equity and trade buyers seems likely to pick up given the low level of sector valuation.”
The British high street is fast becoming a different kind of shopping destination.
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