Watches of Switzerland says no — the £1.75 billion question

§1The public market undervalues the business — says the business.

Reuters reported on Monday that Watches of Switzerland Group, the FTSE 250 retailer that anchors Rolex distribution in Britain and much of America, has held talks in recent months with private equity firms and strategic buyers over a potential takeover. No formal offer materialized, and the reporting — confirmed in trade coverage by WatchPro on Tuesday — indicates chief executive Brian Duffy engaged with the approaches while making clear the board believes the public market undervalues the business. The shares jumped on the news.

The arithmetic of the standoff is simple. At roughly £7.50, the stock values the group at about £1.75 billion after a 55 percent rally this year — and still sits far below the £14.40 peak of January 2022, though comfortably above last August's £3.20 low. Management's position, per the reports, is that any conversation starts significantly above the current price.

Duffy's case rests on the operating numbers: fiscal 2026 revenue up 11 percent to £1.8 billion with adjusted EBIT of £155 million, delivered through what he called "strong execution against a complex operating backdrop."

§2The discount has a name: Bucherer.

The wounds that created the discount are specific. Rolex's 2023 acquisition of Bucherer put the industry's most important brand in direct ownership of a rival retailer and made every Rolex partner's agency feel contingent; a 2024 profit warning tied to lower-value allocations sharpened the point. What has changed since is the demand map — Swiss exports to the United States, the group's growth engine, rose 12 percent in May while the wider industry crawled — and the market's dawning recognition that scaled, Rolex-blessed retail is nearly impossible to replicate.

§3Cheap for reasons of sentiment, not cash.

That is precisely what makes the company attractive to private capital: a structurally advantaged distributor trading at a discount for reasons that are about sentiment and float, not cash generation. It is also what makes the board's refusal credible. Selling the UK and US Rolex franchise at the bottom of its own re-rating would be the kind of decision business schools teach against.