Carphone Warehouse finalises breakaway from Best Buy with cut-price deal

 

Carphone Warehouse delighted the City today by regaining full control of its High Street business from US giant Best Buy, paying less than half of what it received for the stake in 2008.

The company announced it will spend £471 million buying back the 50 per cent stake, having sold it to Best Buy for £1.1 billion. Shares in Carphone surged almost 13 per cent as analysts reckoned chairman and co-founder Sir Charles Dunstone had done a canny deal.

His company will pay Best Buy £341 million in cash and £80 million in shares, plus a further £50 million in cash later, for the half-share in the retail arm, called Carphone Warehouse Europe, which has almost 2400 stores.

Carphone will raise the money through £250 million of loans and around £171 million in shares. About £91 million in shares were being placed today with City institutions, with the remainder going to Best Buy.

Analysts have suggested the deal could boost earnings at Carphone by 30 per cent from this year.

The divorce from its American partner contrasts with Tesco’s recent withdrawal from the country when it called time on its Fresh & Easy convenience format. The sale marks the end of a five-year relationship when Best Buy first bought its 50 per cent stake in Carphone Warehouse Europe and the two companies also launched a separate joint venture selling mobile phones in America.

Carphone collected an £838 million windfall in November 2011 when Best Buy bought out its British partner in America, with most of that cash being returned to Carphone shareholders, who include Dunstone with a 28 per cent stake. Now he and fellow shareholders have benefitted again by taking back full control of Carphone Warehouse Europe’s retail business for £471 million — more than £600 million less than Best Buy paid originally for its half-share in 2008.

But Carphone has previously taken a writedown after the ambitious joint plan with Best Buy to bring its American “big box” stores to Europe flopped.

Chief executive Roger Taylor said: “Following the sale of our US interest last year, we have become increasingly responsible for the day-to-day operations of CPW Europe whilst Best Buy have become more focused on their wholly-owned businesses. Both parties have agreed that this is a good time for us to bring the joint venture to an end.”

In addition to retail arm Carphone Warehouse Europe, Carphone has a 46 per cent stake in Virgin Mobile France and a property portfolio.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Stockbroker

£Basic (OTE) + Uncapped Commission: Guru Careers: A Stockbroker (qualified / p...

Recruitment Genius: Financial Adviser

£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Guru Careers: Application Support Analyst / 1st Line Support

£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence