Paul Singer’s $55bn Elliott Investment Management is considering an all-cash offer for UK electrical goods retailer Currys after rejection of its initial £700m bid (62p per share), according to its statement published on the London Stock Exchange (LSE).
Currys initially rejected the “unsolicited, preliminary and conditional proposal from Elliott regarding a possible cash offer” in its own statement, on the basis that it “significantly undervalued the company and its future prospects”.
In the statement, the activist firm acknowledged “recent press speculation” with regards to its decision to confirm the news.
The statement cited Rules 2.6 and 2.7 of the City Code on Takeovers and Mergers, the UK equivalent of the EU Takeover Directive, in outlining a 17:00 deadline on 16 March 2024, by which time Elliott must either announce a firm intention to make an offer for Currys or announce that it does not intend to make an offer for Currys.
According to Bristol-based law firm Burges Salmon, the City Code applies to all offers for companies which have their registered offices in the UK, the Channel Islands or the Isle of Man if any of their securities are trading on a UK regulated market such as the LSE’s Main Market, a UK multilateral trading facility such as the LSE’s AIM, or on any stock exchange in the Channel Islands or the Isle of Man.
The City Code does not apply to private companies with registered offices in the UK, the Channel Islands or the Isle of Man unless there has been public trading or marketing of their shares in the previous ten years and their place of central management and control is judged to be in either of those regions.
According to a report by the BBC, the retailer’s share price has fallen by over a third over the past year. Last week, Currys closed at 47.08p, valuing the business at about £534m. Following news of takeover interest, its share price jumped by more than 30% to 63p each.
Elliott owns UK bookshop chain Waterstones and academic and specialist bookseller Blackwell’s, as well as stakes in bookseller Foyles, food chain Wasabi.
