JB Hi-Fi says it has been holding preliminary talks with The Good Guys but there has been no agreement or decision made to acquire the whitegoods retailer.
“At this stage, discussions between JB Hi-Fi and The Good Guys are preliminary and exploratory in nature,” Thursday’s statement said.
Shares in JB Hi-Fi jumped more than two per cent during morning trade following the news.
Market analyst Ben Le Brun, from optionsXpress, says the timing of the talks is interesting given that The Good Guys is on the cusp of launching an IPO.
“JB Hi-Fi has earmarked its home division for significant growth,” Le Brun said.
“Their timing is interesting given the IPO was about to take place.
“They have stated their intention at least. So, even if The Good Guys go to an IPO, I say they will be incredibly well-supported and traded at a decent premium to its competitors given JB Hi-Fi have, in effect, shown their hand.”
He said it was unclear whether JB Hi-Fi could afford the takeover, or whether it will have to tap investors.
Either way, news of a possible takeover was well-received by investors, driving JB Hi-Fi’s share price up 63 cents, or 2.76 per cent, to $23.49 by 1100 AEST.
Comment has been sought from The Good Guys.
AAP
