Failure of Best Buy alliance behind huge share out
Several hundred senior staff at Britain’s Carphone Warehouse are in line for huge payouts following the unravelling of the retailer’s alliance with America’s Best Buy group. Average payouts are expected to be around the £110,000 mark, equating to around nine million shares. It follows founder Charle Dunstone’s re-purchase of the 50 per cent of his business sold to Best Buy five years ago for £1.1 billion – a deal which allowed the US retailer to enter Europe using Carphone outlets as a springboard and where, on the continent, they were rebranded under the Phone House name.
But following its own internal struggles and disappointing Phone House sales, Best Buy agreed in April to sell its holding back to Carphone for less than half the price it paid, in a deal that included 42 million shares.
Those shares are now to be sold off, with anything achieving more than the original 190 pence valuation skimmed off and with some of the proceeds distributed among senior Carphone staff.
Between 200 and 300 senior managers running Carphone stores in the UK and continental Europe will benefit from the free share windfall, agreed as part of an incentive scheme back in 2009.