DSG International Plc, the owner of U.K. store chains Currys and PC World, rose as much as 4.8 percent in London trading on speculation that the company could be a takeover target for Home Retail Group Plc.
Home Retail, whose shares gained almost 5 percent yesterday after a newspaper report that Wal-Mart Stores Inc.’s Asda might make an offer, is more likely to be an acquirer, the London-based Times newspaper said today in its market report column. DSG is a possible target, it said.
“Merger speculation has ramped up another notch in the retail sector,” said Manoj Ladwa, senior trader at ETX Capital in London. “Home Retail as prey looks more compelling. Its cash-generative qualities make it appealing to retailers and private equity alike.”
DSG gained as much as 1.66 pence to 36.17 pence in London and was at 36.17 pence as of 9:33 a.m. local time, valuing the company at 1.3 billion pounds ($2 billion). The stock was the second-biggest gainer in the Stoxx 600 Index.
“We can’t comment on rumor and speculation,” said Mark Webb, DSG’s head of media relations. Rollo Head, a spokesman for Home Retail, also declined to comment.
Home Retail extended yesterday’s advance, rising 4.7 pence, or 1.6 percent, to 298.9 pence. The company has a market value of about 2.62 billion pounds.