Good morning. Today we're talking about Currys rejects takeover bid, the UK enters a recession and Arm shares surge.

Big Stories

Currys rejects takeover bid

High street electronics giant Currys has rejected a £700m takeover bid from US investment firm Elliott Advisors, saying it ‘significantly undervalued’ the company's future prospects. Currys, which operates more than 300 UK and employs 15,000 across the country, rebranded under its current name in 2021, having absorbed shops operating under brands including PC World, Dixons and Carphone Warehouse. Like many retailers the company has struggled amid the cost of living crisis with consumers cutting back on spending. Elliott, known for its activist investor approach, bought bookseller Waterstones in 2018. The firm said it is now considering whether or not to make a formal offer for Currys, and under UK takeover regulations it has until 16 March to decide.

UK slips into recession

The UK economy contracted by 0.3% in the last three months of 2023 as consumer spending fell. The country has now shrunk in two straight quarters, meeting the mark for a technical recession. It’s the second G7 nation in a recession, alongside Japan. It’s further evidence that the British economy has essentially flatlined with growth across the whole of last year estimated to be just 0.1% compared with 2022. While previous recessions were long lasting - such as during the global financial crash of 2008 and 2009 - economists expect this one is likely to be mild and short-lived.

Arm shares surge

Arm, the UK chip designer behind the world's most popular smartphone processors, has seen its shares surge by over 40% in the past week fuelled by a combination of positive earnings reports and growing excitement in the AI space. The company's recent quarterly earnings beat analyst expectations, showcasing strong growth across its licensing and software segments. Investors are particularly excited about Arm's licensing model, where it charges royalties on its chip designs used by other manufacturers. This "chip design royalty" model could provide a lucrative recurring revenue stream as the AI market is expected to reach $324bn by 2028. Arm returned to public markets in 2023 with a listing in the New York, seven years after it was taken private by Japanese firm Softbank.

Elsewhere...

Bumper profits: Natwest reported in its highest profits since before the financial crisis as it profited from higher interest rates.

Cooling prices: Energy bills will fall in April by nearly £300 a year for a household using a typical amount of gas and electricity, a leading forecaster says.

Amazon selloff: Jeff Bezos has sold more of his shares in Amazon, bringing the total value of sales in recent days to more than $4bn.

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Number of the Day

£750 million

British Gas’ profit in 2023, a tenfold increase on the year before.

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