Financial News

  • 25 March 2014, 8:37

Carphone Warehouse And Dixons Extend Talks

Carphone Warehouse and Dixons Retail have been granted an extension by regulators over their potential 4bn merger.

The Takeover Panel had initially set a 5pm deadline on Monday for the firms to announce if they would go ahead with the deal.

However the panel has now confirmed an eight-week extension, to May 19, for the discussions to conclude.

The companies announced talks on February 24, with Sky News City Editor Mark Kleinman revealing that Dixons boss Sebastian James was set to be CEO of the merged firms.

Dixons, which owns the PC World and Currys brands, is the second biggest electrical retailer in Europe.

Carphone Warehouse is Europe's largest independent mobile phone retailer.

The tie-up would see a combined presence of about 2,900 outlets and a potential place in the blue chip FTSE 100 index.

The group could have a potential 1,300 stores in the UK.

"Since the announcement of February 24 was made when discussions were at a very preliminary stage, both parties have agreed that they require more time to evaluate a potential merger of the two businesses," the firms said in a statement.

Carphone had a disappointing Christmas period, with like-for-like sales down 4.7% and connections down 16.6% due to a large drop in the pre-paid phone market.

Dixons, meanwhile, has benefited from the demise of rival Comet in 2012.

Like-for-like sales between November 1 and January 4 were 5% higher - with online growth rising by 23%.

In late morning trade, Dixons' share price was down more than 1.56% while Carphone Warehouse was down more than 3.4%.