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Carphone Warehouse prospects brighten as it considers buyout
(City A.M. (UK) Via Acquire Media NewsEdge) SHARES in Carphone Warehouse hit their highest level since January yesterday as the mobile phone retailer said it may raise dividends next year, thanks to a sunnier outlook for handset sales.
The company's chief executive Roger Taylor also said that Carphone Warehouse could buy Best Buy's stake in the two firms' joint venture if a takeover plan for the US retailer succeeds. Best Buy founder Richard Schulze is trying to push through a deal to take Best Buy private, and the terms of the CPW Europe joint venture would allow Carphone Warehouse to take Best Buy's 50 per cent stake at a discount. CPW Europe is the company's key retail business, spanning 2,400 stores in the UK and mainland Europe.
"Shareholders would expect us to explore [the purchase], so we would," chief executive Roger Taylor said.
Shares in the company rose more than eight per cent yesterday, as Carphone Warehouse said pre-tax profit rose 30 per cent to £8.6m in the first half of the financial year, much higher than analyst forecasts.
The other significant part of Carphone Warehouse, beyond its retail operation, is its 46 per cent stake in Virgin Mobile France, which saw relatively flat trading.
The company said it expects better trading this Christmas, thanks to lower smartphone prices.
Carphone Warehouse Group PLC 190.0 p 184.00 14 Nov 187.5 185.0 182.5 180.0 177.5 175.0 172.5 14 Nov 8 Nov 9 Nov 12 Nov 13 Nov
(c) 2012 City A.M.
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