Carphone Warehouse to buy Best Buy's stake in CPW Europe

Carphone Warehouse's shares advanced Tuesday after announcing a proposal to buy out Best Buy in joint venture CPW Europe.

Carphone Warehouse's shares advanced Tuesday after announcing a proposal to buy out Best Buy in joint venture CPW Europe.

The company has conditionally agreed to become the sole owner of CPW Europe by purchasing Best Buy's 50% stake for a net consideration of £471m.

Chief Executive, Roger Taylor, said the proposed acquisition would bring an end to a five-year joint venture with Best Buy.

"Carphone Warehouse and Best Buy have enjoyed a great relationship over the last five years ensuring that we shared and enjoyed many aspects of each other's business attributes," he said.

"However, following the sale of our US interest last year, we have become increasingly responsible for the day-to-day operations of CPW Europe whilst conversely Best Buy have become more focused on their wholly-owned businesses. As a result, both parties have agreed that this is a good time for us to bring the joint venture to an end, whilst ensuring that our relationship remains in place by way of our global buying alliance."

He said the transaction will simplify the company's ownership structure, streamline management decision-making and give the company control over growth opportunities across Europe.

Separately, the firm announced placing of 47m new ordinary shares of 0.1 pence each, representing about 9.99% of the existing issued ordinary share capital.

Proceeds of the placing will be used to partly fund the proposed acquisition.

RD

Recommended

Share tips of the week – 22 October
Share tips

Share tips of the week – 22 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
22 Oct 2021
Three dividend stocks from the dynamic Asia/Pacific region
Share tips

Three dividend stocks from the dynamic Asia/Pacific region

Professional investor Sat Duhra of the Henderson Far East Income investment trust highlights three of his favourite stocks.
18 Oct 2021
Share tips of the week – 15 October
Share tips

Share tips of the week – 15 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
15 Oct 2021
Trading: stash the family cash in this cheap wealth management firm
Trading

Trading: stash the family cash in this cheap wealth management firm

Wealth management is a growth market. Rathbone Brothers should be a prime beneficiary – and looks cheap. Matthew Partridge explains the best way to pl…
12 Oct 2021

Most Popular

How to invest as we move to a hydrogen economy
Energy

How to invest as we move to a hydrogen economy

The government has started to roll out its plans for switching us over from fossil fuels to hydrogen and renewable energy. Should investors buy in? St…
8 Oct 2021
How to invest in SMRs – the future of green energy
Energy

How to invest in SMRs – the future of green energy

The UK’s electricity supply needs to be more robust for days when the wind doesn’t blow. We need nuclear power, says Dominic Frisby. And the future of…
6 Oct 2021
Properties for sale for around £1m
Houses for sale

Properties for sale for around £1m

From a stone-built farmhouse in the Snowdonia National Park, to a Victorian terraced house close to London’s Regent’s Canal, eight of the best propert…
15 Oct 2021