JB Hi-Fi (JBH) touched an all time high of $30.87 as investors became more convinced that media reports that it will buy smaller rival, The Good Guys in a deal to be revealed next week.
The widely tipped acquisition will be funded by a $300 million equity raising JB Hi-Fi will launch next Tuesday. That would see between 9 and 10 million JB Hi-Fi shares issued to major institutions.
The shares jumped 5.5% yesterday, closing on the all time high. They were up 4.6% in early trading after morning media reports.
JB Hi-Fi tried to quash speculation yesterday, telling the market that it had “made no decision and nor has it entered into any agreement with respect to an acquisition”.
The company "remains in the sale process and continue discussions with The Good Guys," it said in a statement released to the ASX.
But media reports said negotiations were almost completed and lawyers were finalising the sale documents.
JB Hi-Fi is expected to pay between $850 million and $900 million for The Good Guys, which has also been which has been looking at a market float.
Taking over The Good Guys would boost JB Hi-Fi’s footprint by about 100 stores to almost 300 Australia-wide. The Australian Competition and Consumer Commission approved JB Hi-Fi’s takeover last month.
