Kesa, Europe’s third-biggest electrical goods retailer, has become the second firm to announce a withdrawal from the cut-throat British market this week, agreeing to sell its loss-making British chain Comet for just 2 pounds ($3.20), Reuters reported. Hailey Holdings Ltd. and Hailey Acquisitions Ltd., entities advised by private equity firm OpCapita, are buying Comet.
(Reuters) – Kesa, Europe’s third-biggest electricals goods retailer, has become the second firm to announce a withdrawal from the cut-throat British market this week, agreeing to sell its loss-making British chain Comet for just 2 pounds ($3.2).
Shares in the group jumped 8 percent in early trading on Wednesday after it said it would sell Comet to Hailey Holdings Ltd and Hailey Acquisitions Limited, entities advised by private equity firm OpCapita LLP.
Kesa said it will invest 50 million pounds in the purchaser, effectively paying the sum as a dowry to take the business off its hands, and will retain the liability for the Comet Defined Benefit Pension Scheme.
Comet, which trades from about 250 stores and employs 10,000, was put up for sale by Kesa in June.
Specialists such as Comet and Currys owner Dixons Retail face cut-price competition from supermarket chains and the internet, at a time when consumers are cutting back on discretionary purchases due to a squeeze on household budgets.
On Monday top U.S. electronics retailer Best Buy Co scrapped plans for a chain of UK megastores.
Kesa said the Comet deal is subject to the approval of shareholders and was expected to complete in February.
The firm’s largest investor Knight Vinke said it would vote in favour of the deal.
Kesa, whose main business is French market leader Darty, also updated on trading for its first half to Oct. 31.
It said total revenue fell 7.6 percent in euros, 6.2 percent in local currency, and by 7.9 per cent on a like-for-like basis.
“The revenue performance reflected an improvement in all divisions in Q2 compared to Q1 despite increasingly challenging underlying market conditions through the period,” Kesa said.
Gross margin improved by around 10 basis points.
Shares in Kesa were up 7.7 pence at 109.75 pence at 0819 GMT, valuing the business at 582 million pounds.