2nd UPDATE: Carphone Warehouse, Best Buy In GBP1.1 Billion JV
May 8, 2008 |13:41 | Biotechnological | Others By : Team X
Carphone Warehouse will put its European and U.S. retail business, which operates from more than 2,400 stores, into the joint venture, in return for a cash payment of GBP1.1 billion from Best Buy.
The two companies said the deal aims to accelerate the development of Carphone Warehouse's retail business and to introduce Best Buy stores across Europe.
Carphone Warehouse is Europe's largest independent mobile-phone retailer by sales, while Best Buy is the largest electronics retailer in the U.S.
The pair already have a partnership whereby Carphone Warehouse operates out of Best Buy stores in the U.S.
Carphone Warehouse said it will use the proceeds of the deal to repay existing debt, invest in broadband customer growth and infrastructure and to invest in new areas of growth. Carphone Warehouse Chief Financial Officer Roger Taylor said the deal will be 10% to 15% earnings dilutive initially but despite the short-term hit to earnings will deliver long-term value for shareholders.
Analysts said the deal was a positive move which will reduce debt and free up capital to invest in the telecoms business. Landsbanki analyst Dan Gardiner said that based on earnings dilution of 10% to 15%, Carphone Warehouse's shares trade at 14 times estimated 2009 earnings which "still represents a significant premium to both the general retail and telecoms sector."

Microsoft Corp. Chairman Bill Gates, traveling through Asia, met Tuesday with South Korean President Lee Myung-bak and championed his vision of the future of high tech and the Internet.
A proposed "OPEC-style" rice cartel in Southeast Asia will go nowhere due to the inability of governments to cooperate with each other and control output from their farmers, analysts and traders said on Friday.
The national average price for regular gasoline rose about 15 cents in the last two weeks, according to a survey.
The San Ramon, Calif. integrated oil and gas giant said earnings for the three months ended March 31 increased to $5.17 billion, or $2.48 a share, from $4.72 billion, or $2.18 a share in the year-ago period, which included a one-time $700 million gain. 
Consumer price inflation in the euro area rose at an annual pace of 3.3% in April, according to a preliminary estimate by the statistical agency Eurostat. That's still well above the ECB's medium-term target of just below 2%, but ends months of surging price pressures that saw the rate hit 3.6% in March. The pullback marks the first dip in the annual rate since August.
Crude oil fell as BP Plc prepared to start the Forties North Sea pipeline after a two-day shutdown and as the U.S. dollar strengthened, limiting the appeal of commodities as an inflation hedge.
Microsoft, the world's biggest software maker, can't afford to let Yahoo go, said Sachin Shah, an analyst for ICAP Securities in Jersey City, New Jersey. To crack Google Inc.'s dominance of the Internet advertising market, Microsoft is looking to handle more Web searches, sell advertisements with more graphics and videos, and be able to target campaigns and track their success.
Imagine your rich uncle calls up out of the blue and says, "I'm going to send you six hundred bucks - spend it however you want."










