Kingfisher Gains on Home Depot Report Jan 13, 2004

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Shares in British home-improvement retailer Kingfisher Plc have risen following a recent press report that rekindled talk that U.S.-based Home Depot is considering a takeover, though analysts remain skeptical.

"In the long term, if Home Depot wants to move to Europe then Kingfisher would be an attractive proposition, but the returns are much higher in the U.S," said Tony Shiret, retail analyst at CSFB.

Kingfisher, Europe's biggest home improvement firm, and Home Depot, the world's largest, both declined to comment after the Observer newspaper said Home Depot was considering an eight-billion-pound (approx. U.S. $14.3 billion) bid, citing Wall Street investment bankers.

Speculation about a takeover of Kingfisher has intensified since it demerged its electrical product arm Kesa in July. Home Depot has long been considered a likely predator.

But analysts said the timing was not yet right and doubted the shares would hold their gain.

"I would say that anything attributed to U.S. investment bankers should be treated with a huge degree of skepticism," Mr. Shiret said. "I don't think it's going to happen."

Mr. Shiret also said he believes it is unlikely that Home Depot would swoop while Kingfisher was still in the early stages of a massive integration of its French acquisition, Castorama. (Reuters)

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