Dixons Carphone shows signs of life but could a bidder be circling?

The retailer's overseas businesses are flying which has led to speculation of interest from an activist investor with a plan to break up the company

Dixons Carphone's UK arm: Trading was better than expected over the festive period (PA)

Welcome to the Brexit business bargain basement sale! On the block, Dixons Carphone, which is available on one of those three for two offers. You get a Nordic business, and a Greek business and a UK business.

Guess which bit comes free, and no it isn’t the Greek bit. Greece is no longer Europe’s problem child.

The offer works like this: You buy up the whole shebang and sell off the Greek and Nordic bits. If you can get enough for them (and some analysts think you can) you get what remains, the UK rump, for free. Bonus!

This, at least according to Sky News, is what Elliott Advisors is looking at doing. It’s one of those outfits that variously gets referred to as an ‘activist investor’ a ‘hedge fund’ or a ‘vulture capitalist’.

Which one you use depends very much on your personal preference and political standpoint.

The suggestion that Elliott is sniffing around might very well be simply one of those City rumours that do the rounds when people want to generate a bit of excitement about a particular share. Sky’s report says Elliott looks at an awful lot of companies, which is quite true, and it might not do anything. So not quite so exciting.

But it would actually come as something of a surprise if it, or an outfit like it, wasn’t looking at Dixons Carphone.

The shares sit on a pitiful rating of just 6.7 times forecast earnings for the year to January 2019, while offering holders a prospective dividend yield of 6.2 per cent.

When you consider that the Greek business reported a 19 per cent rise in sales at stores open at least a year over the festive season, and no that isn’t a typo, it really was 19 per cent, and the Nordics did 3 per cent, which counts as a damn fine result in retail, the attractions are rather obvious.

The UK business, consisting of Curries PC World and Carphone Warhouse, isn’t so pretty. The latter part has been hit hard by the fact that people are holding onto their handsets for longer and sales fell by 7 per cent,.

But that was at least no worse than feared, while electricals ticked up by 2 per cent.

Thanks to lag created by those phones, overall group wide revenues increased by just 1 per cent, but that was better than most expected. Maybe CEO Alex Baldock is onto something with the new strategy he unveiled last year. Maybe his shareholders should sit tight and see if he is. The stock has been showing a few signs of life of late.

The big fly in the ointment is, of course, Brexit. Given that, if an Elliott, or an organisation like it, were to knock on the door then investors would likely be inclined to listen.

Brexit has kicked the pound in the guts and done the same to sentiment. The rest of the world thinks we’re a basket case. That means that a lot of British businesses are looking cheap as chips, including this one.

Taking back control may very well mean giving up control of a lot of decent companies to bidders interested in cutting and sawing and chopping.