Russia-based electronics retailers M.video and Eldorado have failed to reach an agreement on their possible merger and decided to continue development independently, Kommersant reports. The negotiations between the two broke down as the parties failed to agree on M.video’s business valuation. Its owners believe the price should be higher than the current stock market valuation of the company and that the current estimate does not reflect its potential.
News of the potential merger surfaced in May 2011 when Czech-held PPF group, owner of Eldorado, announced its intention to sell the chain to competitor M.video in exchange for a controlling stake in the combined company. The plan was also in line with M.video’s strategy for aggressive expansion, securing a leadership position in the market and increasing M.video’s attractiveness ahead of its scheduled secondary public offering in the near future.
