Carphone set to profit from Best Buy share issue

CARPHONE Warehouse Group is set for a £25m windfall after it laid out plans to list the 7.5 per cent of the company that recently entered the hands of US retailer Best Buy.

In April, Best Buy agreed to sell its 50 per cent stake in Carphone Warehouse’s European operations back to the British firm for a total consideration of £471m, in a deal that included 42m shares.

Yesterday, Carphone Warehouse said it would place those shares, and that as per the terms of the deal, it will skim off any value above the 190p per share that the mobile retailer was valued at when it agreed to acquire Best Buy’s stake.

Based on yesterday’s 251p per share closing price, the tranche of shares will be worth £105.7m, leaving Carphone Warehouse with a £25.7m windfall to Best Buy’s £80m.

Best Buy, which has sold out of Carphone Warehouse Europe for less than half of what it paid five years ago, is understood to have no desire to retain the shares, and was looking to sell out as soon as possible.

Carphone Warehouse, which has Deutsche Bank and UBS handling the bookrunning, said it decided on the placing having determined there is sufficient market demand.