ECONOMY

UK retailer Dixons acquires majority stake in Kotsovolos

UK-based retailer Dixons, Europe’s biggest retail chain of electrical appliances and electronics, acquired majority control of Greek retailer Kotsovolos, it was announced yesterday. Dixons agreed to pay 53.7 million euros (6.50 euros per share) to buy a 38.7 percent stake in Kotsovolos. Added to the 13.6 stake it had acquired three years ago, the transaction gives Dixons a 52.3 percent stake. The UK retailers bought out the 17.2 percent stake held by Marinos Paravalos Group and got the other 21.5 percent from main shareholder Fourlis Holdings. The offer of 6.50 euros per share was 28 percent higher than the average share price over the previous month. Still, Kotsovolos’s shares closed at 6.50 euros, having risen 9.43 percent. «The Fourlis Group will retain a 20 percent stake in Kotsovolos for a transitional period. Dixons will retain a right of first preference for the stake for five years,» Dixons said in a statement. Fourlis retains the right to transfer its stock to Dixons in two equal installments, at two and four years, following the signing of the agreement. It should be noted that, according to current legislation, Dixons must make a public offer in order to acquire all Kotsovolos’s shares at 6.50 euros per share. Dixons’s decision to buy a majority stake in Kotsovolos comes at a time of increasing rumors about a stronger presence by European retailers in Greece. Kotsovolos currently operates about 80 outlets in Greece under the brand names Kotsovolos and Radio Athina. OneWay shops, retailers of information technology and telecommunications, also operate within Kotsovolos using the shop-in-shop method. The Dixons group operates over 1,400 outlets in 12 countries. The group controls a number of subsidiary chains, such as Currys, PC World, PC City, Link, UniEuro and ElectroWorld. The group uses three subsidiaries, PC World Business, Genesis Communications and Micro Warehouse to support business-to-business trade. The group’s expansion in continental Europe has taken place over the past four years with a series of acquisitions and is expected to continue. The group’s management has announced that, during the current financial year (which began on May 1 and ends on April 30, 2005), it plans to create 2,000 new jobs, half of them outside the UK. Dixons consolidated profit in the year ending April 30 was 6.5 billion pounds sterling.