Currys bidding war: Chinese retail giant JD joins race as shares soar 33 per cent
Shares in Currys soared over 35 per cent this morning after Chinese retail giant JD unveiled itself as the latest firm to consider buying the electrical goods chain.
The board of JD said it is in the “very preliminary stages” of exploring a takeover.
An update this morning, follows speculation in The Telegraph which said the Beijing based homeware and technology retailer was exploring new avenues amid a period of increased competition.
“JD.com confirms that it is in the very preliminary stages of evaluating a possible transaction that may include a cash offer for the entire issued share capital of Currys.
“There can be no certainty that any offer will ultimately be made for Currys, nor as to the terms on which any offer might be made. A further announcement will be made if and when appropriate.”
It is also believed the firm held informal talks with Currys this week regarding a takeover deal.
Monday’s developments follow a whirlwind weekend for Currys after it rejected an unsolicited £700m bid from activist investor Elliot on the grounds that it “undervalued” the company.
However an update from the hedge fund, which also owns Waterstones, suggests that a deal may still be on the cards.
As for JD, a takeover of one of Britain’s best known brands would help expand its presence in the western retailer market.
The Chinese e-commerce business has also faced increased competition from the likes of Temu and Shein.
Russ Mould, investment director at AJ Bell, said: “Over the years, Currys UK business has downsized and sharpened focus on retail parks where stores have the kind of space needed to showcase products and advise customers.
“It’s not been an easy journey for Currys as its mobile phone arm has suffered from shifting consumer habits whereby people are upgrading handsets less frequently. Across the board, Amazon and other online retailers have pushed hard on price and Currys has had no choice but to match them.
He added: “Consumers have been shying away from big-ticket items which has created a tougher environment in which to shift TVs and laptops.
“Currys’ Nordics business has struggled with vicious competitive and inflationary pressures, but there is now a shift whereby rivals are focusing more on profit and cash and less on market share growth.
“These headwinds have weighed on the company’s valuation and left the share price in the gutter.”