Bloomberg News

Kesa Electricals Advances on Sale of Stake: London Mover

May 03, 2012

Kesa Electricals Plc (KESA) rose in London trading after agreeing to sell a majority of Darty Telecom in France to Bouygues Telecom while it continues to reap a share of revenue from the business.

Kesa, owner of the Darty consumer-electronics chain in France, will get 40 million euros ($53 million) for 99.9 percent of Darty Telecom, the London-based company said today in a statement. It will also “receive revenue streams based on the existing and future subscriber base” and for customer and management services.

The stock rose 1.7 percent to 56.95 pence at the close in London after gaining as much as 9.3 percent earlier in the day. That valued the company at about 302 million pounds.

The transaction “allows Darty to enhance its telecom offer, building on the state-of-the-art mobile and fixed line services of Bouygues,” Kesa Chief Executive Officer Thierry Falque-Pierrotin said in the statement. Darty Telecom provides services to 340,000 people and had sales of 131.5 million euros in the year ended April 30, 2011.

Kesa shares have fallen 42 percent since Nov. 9, when the retailer agreed to pay investment firm OpCapita LLP to take the unprofitable Comet chain in the U.K. off its hands as losses worsened. The company said in January that profitability had slumped and that market conditions would be “challenging” in the run-up to the French elections.

Kesa will consider more disposals and tie-ups after the Darty Telecom sale, CEO Falque-Pierrotin said today in a phone interview.

Singer Capital Markets raised its recommendation on Kesa shares today to “fairly valued” from sell. Of analysts who share their reports with Bloomberg, 12 of 22 still recommend selling the stock.

Adam Cochrane and Andrew Hughes, analysts at UBS AG, said April 25 that investors should buy the stock because property holdings are worth almost as much as Kesa’s market value.

To contact the reporter on this story: David Risser in London at drisser@bloomberg.net

To contact the editor responsible for this story: Mark Gilbert at magilbert@bloomberg.net


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