UK retailers Dixons and Carphone get extension to merger talks

Mon Mar 24, 2014 2:27pm EDT
 
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By James Davey

LONDON (Reuters) - Britain's Takeover Panel has granted Dixons Retail DXNS.L and Carphone Warehouse CPW.L an eight-week extension to their negotiations for a possible 4 billion-pound ($6.6 billion) merger.

The extension was given on Monday as speculation that rival Phones4u PHONE.UL could enter the fray was dampened.

Dixons, Europe's second-biggest electricals retailer, and Carphone, Europe's largest independent mobile-phone retailer, now have until May 19 to confirm whether they intend to press ahead with a deal that would create a group with about 2,900 stores across Europe and which it is expected would find a place in Britain's FTSE 100 share index <0#.FTSE>.

Dixons and Carphone announced they were in merger talks on February 24 and the Takeover Panel set an original deadline of 1700 GMT Monday.

"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 two companies said on Monday.

A Sky News report said BC Partners BCPRT.UL, the private equity firm that owns Phones4u, sounded out senior Dixons executives about a possible tie-up in the days following the emergence of the Carphone merger talks.

Phones4u already operates outlets in some Dixons stores through a deal that runs to May 2015.

A source familiar with the situation told Reuters Dixons was not currently in talks with Phones4u about any other business tie-up.   Continued...

 
Signage is seen on the outside of Carphone Warehouse offices in west London October 10, 2008. REUTERS/Toby Melville