CompUSA Inc. (NYSE: CPU) shares shot up 2 13/16, or 42 percent, to 9 9/16 Monday after Mexican retailer Grupo Sanborns SA de CV said it will buy the computer retailer for $10.10 a share.
Grupo Sanborns, which indirectly owns about 14.8 percent of CompUSA shares, said it will buy all outstanding shares. Sanborns said it expected Telefonos de Mexico (NYSE: TMX), Microsoft Corp. (Nasdaq: MSFT) and SBC Communications Inc. (NYSE: SBC) to be minority investors in the company. "We believe that we can build CompUSA into an even stronger competitor in the consumer technologies sector," said Grupo Sanborns Chairman Carlos Slim Domit in a prepared release. "We also believe that we can re-energize the organization by taking the consumer experience of shopping at CompUSA to a new level, by uniting excellent customer service, whether in-store or online."
Grupo Sanborns operates 305 retail stores, including Sanborns, Sanborns Cafe and Sears Roebuck de Mexico, in major Mexican cities.
Earlier this quarter, CompUSA announced that its second-quarter sales would fall to about $1.38 billion, down 21 percent from the year-ago quarter. Sales at stores open at a least a year fell 1.8 percent year-over-year.
Cost-cutting measures and other moves begun during the summer to improve profit margins resulted in less holiday promotion this year, which in turn led to lower retail sales compared to last year, company executives said.
The company did see increased sales of higher margin products such as notebook computers, cameras and video games. Gross margins in the second quarter exceeded 16 percent, compared to 15.2 percent in the fiscal first quarter, the company said.
CompUSA will announce its second-quarter results Feb. 2.
Last quarter, it missed analysts' estimates, losing $12.1 million, or 13 cents a share, on sales of $1.36 billion.
CompUSA shares moved up to a 52-week high of 14 3/16 in March before falling to a low of 4 7/8 earlier this month.
Eight of the 11 analysts following the stock rate it either a "hold" or "sell" recommendation.