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A Currys shareholder, JO Hambro Capital Management (JOHCM), has stated that the electronics retailer should hold out for an offer of £1bn amid takeover talks.
According to The Standard, JOHCM, a UK equity income fund, stated that an offer between 80p and 100p per share would be “acceptable”. An offer of 90p per share would value the company at £1bn.
JOHCM said it believed the value of the deal compared to the size of the retailer’s sales showed the current “absurdity” of the UK stock market.
Clive Beagles and James Lowen, the fund’s senior managers, told the Standard: “Currys’ core business, with leadership positions in both online and offline markets across the Nordics and the UK, generates approximately £9.5bn in sales.
“This clearly shows the absurdity of UK stock-market valuations, which we have discussed extensively in these reports over the last two years.Our normalised earnings per share for Curry’s is 12p, suggesting an exit per earnings of 8x at the top end of the range.”
Currys revealed last week that it had rejected a second bid from Elliot worth 67p per share, an increase from its initial 62p-a-share offer that valued the retailer at £700m.
