Dixons boosts stake in UniEuro in £230m deal

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DIXONS, the UK’s biggest electronics retailer, is to spend £230 million raising its stake in Italian electrical retailer UniEuro to more than 95 per cent.

Dixons is buying a further 71.37 per cent holding, in addition to the 24.34 per cent stake it bought last year in Italy’s second largest and most profitable electrical retailer.

The deal makes Italy Dixons’ biggest market outside the UK.

Dixons’ chief executive John Clare said: "UniEuro is a highly successful business with well-developed plans for future growth including a significant increase in the number of stores in new regions of Italy.

"It is the ideal partner for Dixons in Italy, with market leading profitability and a strong number two position in its market."

The stake is being sold by UniEuro’s management and a consortium made up of JP Morgan, Rhone Capital LLC and MCC SpA.

Dixons, which sells goods ranging from computers to fridges, bought 24.34 per cent of UniEuro in late November last year for 65 million to expand its portfolio of European businesses and generate buying opportunities.

Hesitant to buy the whole company in one step due to market conditions, Dixons said last year it intended to buy the remainder by July 2003. It has an option to buy the remaining 4.29 per cent of UniEuro it does not already own from the company’s management for 19 million in July 2004.

Dixons said UniEuro’s sales in the first nine months of 2002 were up by 40 per cent overall, and by more than 4 per cent on a like-for-like basis against the same period last year.

UniEuro trades from 88 stores mainly located at out-of-town sites in northern Italy, but it has plans to expand into other regions.

The deal, subject to clearance by EU regulators, comes a month after veteran Dixons chairman Sir Stanley Kalms stepped down from the group.

Sir Stanley bowed out on a high note as he reported a pick-up in sales at the group on his last day at the helm, with like-for-like sales for the 19 weeks to 8 September up 6 per cent and ahead of City forecasts.

Dixons has more than 1,280 stores in total, across the UK, Ireland, the Nordic countries, France and Spain, and owns well-known brand names including Currys, The Link and PC World. For the year to April, Dixons reported pre-tax profit of 282.3 million.

The shares closed up 5.5p at 160.5p yesterday.