2nd Oct 2024 09:13
(Alliance News) - AO World PLC on Wednesday said it has agreed to buy musicMagpie PLC for GBP10.0 million in cash to boost its mobile and consumer technology sectors.
FTSE 250-constituent AO World is an electrical retailer that specialises in home appliances and electricals, based in Bolton, England.
AIM-listed musicMagpie is an online retailer that buys and sells refurbished electronics and second-hand computer games, consoles, books, films and music based in Stockport, England.
musicMagpie shareholders will receive 9.07 pence per share in cash. The stock jumped 51% to 8.68p in London on Wednesday morning.
AO World shares were up 2.9% to 112.80 pence each. It has a GBP654.6 million market capitalisation.
AO World said the proposed offer has been endorsed by musicMagpie directors, who together have a 12.3% stake. The offer has also received support from other investors, meaning it has support from 54% of total shareholdings.
AO World said it expects the acquisition to increase its capability and value capture in the mobile and consumer tech categories.
Additionally, the company said the acquisition will prepare it for the shift of the consumer technology market to sustainability and repair, and the expected growth in refurbished technology.
Non-Executive Chair of AO World Geoff Cooper commented: "The proposed acquisition of musicMagpie presents a strategic opportunity to integrate one of the UK's leading mobile re-commerce operators into our portfolio. With highly complementary business models, this acquisition will enable us to broaden our customer offerings while simultaneously advancing our sustainability objectives. This alignment positions us to drive growth and innovation in an increasingly environmentally-conscious market."
musicMagpie Chair Martin Hellawell added: "AO's offer is the result of musicMagpie's extensive process to seek an acquiror for the business and represents an opportunity for shareholders to realise their holdings in full and in cash at a significant premium to the prevailing share price. The musicMagpie board believes musicMagpie will benefit from being a part of the AO Group that has the scale and reach to support musicMagpie's future growth and development."
AO World said it expects the acquisition to become effective during the first quarter of 2025.
By Lydia Doye, Alliance News reporter
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