Shares of the FTSE 250-listed Currys PLC (GB:CURY) surged nearly 38% after Chinese e-commerce company JD.com (HK:9618) announced its intentions for a possible bid to acquire the British electricals group. The new interest from JD.com ignited a potential bidding battle for Currys, as it came shortly after the bid from the U.S. investment group Elliott Advisors. Year-to-date, CURY stock has gained around 28% in trading.
Currys is a tech retailer and after-sales service provider, operating around 300 stores across the UK.
Potential Bidding War Looms
Elliott’s offer of 62p per share valued the company at around £700 million. However, Currys turned down the offer, saying that it significantly undervalued the company. Meanwhile, JD.com is in the “very preliminary stages” of exploring a possible deal that might involve a cash offer to acquire Currys.
Currys has been in the midst of a turnaround effort since Alex Baldock assumed the role of CEO in 2018. During the pandemic, Currys shut down over 500 Carphone Warehouse stores in the UK, resulting in the loss of 2,900 jobs, as part of its efforts to turn around its ailing mobile phone business.
Over the past two years, the retailer has faced challenges with high inflation dampening demand across all its markets. Analysts believe that the low-rated struggling UK companies are currently acquisition targets, mainly by private equity companies.
Are Currys Shares a Good Buy?
According to TipRanks, CURY stock has a Moderate Buy consensus rating, backed by one Buy and two Hold recommendations. The Currys share price target is 65.33p, which implies a possible upside of 2.64% from the current trading level.
