Carphone Warehouse sale rumours are growing

Carphone Warehouse sale rumours are growing

Rumours of the sale of Carphone Warehouse intensified in the City last week, prompting an 11% rise in Carphone's share price.

The share price went from 231pence on 15 April to 257pence on 25 April (Friday). 

The rumours have been circling since the start of the year, but the recent split of the Carphone group between a telecoms entity and the traditional retail division has led many in the City to believe that chairman, founder and chief executive Charles Dunstone is planning an exit strategy.

Current speculation is that US partner BestBuy, which already has a 3% share in Carphone, will buy the retail business, while Vodafone UK will take over the telecoms business largely made up of the TalkTalk and AOL assets.

An analyst at one of the biggest investment banks said: ‘Carphone is a perennial bid target but it’s always been hard for it to make sense on a single acquirer basis. Voda would not want the retail chain, and any retailer would struggle to make sense of buying a telecoms base.

‘The clearer delineation Carphone created [last week between retail and telecoms] has definitely generated more belief in a transaction.’

While there is little concrete substance underlining the speculation, sources close to Dunstone have said he has wanted to devote more time to his passion of sailing, and he is satisfied he has established a lasting legacy with both parts of his business.

The difficulty for Dunstone (and potential buyers) would be the immediate drop in value in the business if he was no longer involved.

The theory from the City is also based on Vodafone's perceived intent to add a fixed-line broadband business. Vodafone’s broadband service has failed to make a significant impact since it launched, with stores reporting very weak sales of fixed-line broadband.

Dunstone has made TalkTalk and Aol the third largest broadband provider in the UK with 2.6million subscribers. Carphone had 1.6 million 'unbundled' customers on its network in January this year, taking control of its network infrastructure.

 

Carphone declined to comment.

Written by Mobile Today
Mobile Today

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