A Currys shareholder has said the retailer should hold out for an offer worth £1bn amid the ongoing takeover saga between Waterstones owner Elliott Advisors and Chinese online shopping giant JD.com.
JO Hambro Capital Management (JOHCM) UK Equity Income fund, which is a top 10 shareholder, said an offer between 80p and 100p per share would be “acceptable”.
A 90p per share offer would value the electricals retailer at around £1bn, The Standard reported.
The JOHCM UK equity income fund 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.
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The fund’s senior managers Clive Beagles and James Lowen said: “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.
“Our range reflects some pragmatism, as we can rotate the value received into other very cheap stocks.”
Last week, Currys revealed it had rejected a second takeover bid put forward by Elliott of 67p-per-share, an increase from its initial 62p-a-share that valued the retailer at £700m.
It claimed the bookshop owner had once again “significantly undervalued the company and its future prospects”.
The electrical specialist is also being courted by JD.com, which said it was in the early stages of considering an offer late last month.
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