JD Sports, Marks & Spencer, AO World and Dunelm could all see their share prices marked higher following Currys’ rejection of a £700 million takeover bid.
Analysts at Shore Capital noted how many small and mid-cap stocks have been operating at depressed values and therefore weren’t surprised management rejected the offer.
It believes several mid-cap retailers would experience a share price lift on the back of the news.
Shares in Currys PLC (LSE:CURY) rallied 34% on Monday to reach a market capitalisation of £700 million, but the UK broker believes bidder Elliot Advisors will have to go higher to get a deal done.
Shore Capital said: “Currys equity, like a lot of listed UK retail stocks, has been lowly rated and so to us, this is not a case of add 30% to the rolling day average and off you go.
“Indeed the depressed nature of UK SME equities has meant that 60% to 80% has been the premia that is needed to actually extract stocks from the market.”
In October, furniture retailer ScS was bought by Italian peer Poltronesofà for around £99.5 million, more than a 60% premium to shares at the time.
Elliot Advisors has until mid-March to respond to the rejected deal, however, reports have suggested Chinese retailer JD.com is also interested.