Future Buys Price Comparison Company GoCompare for $794 Million
(Bloomberg) -- Specialist magazine and website publisher Future Plc agreed to buy GoCo Group Plc to accelerate a push into digital commerce in a deal that values the price comparison site owner at 594 million pounds ($794 million).
GoCo Group shareholders will own approximately 19% of the combined business, the companies said in a statement. Future’s cash-and-shares offer represents a 23.6% premium to GoCo’s closing stock price on Tuesday.
Future has a stable of specialist titles like soccer publication FourFourTwo and venerable equestrian magazine Horse & Hound, which it uses to gain insights into consumers as well as direct them toward certain brands.
Future plans to use the owner of the ‘Go Compare’ price comparison site to win more business with brand marketing departments. The deal has the backing of Peter Wood, GoCo Group’s chairman and largest shareholder, who owns almost a third of the target company.
GoCo shares soared as much as 22%, nearly meeting the offer price of 136 pence per share in early London trading. Future shares fell 0.3% to 1,956 pence.
“A counterbid from within the sector cannot be ruled out, but deal risk will be high,” said Jefferies analyst Giles Thorne in a note to clients. “The Competition and Markets Authority has the well-published view that U.K. price comparison is an “effective market.”
Future’s shares have soared in the past five years as the company has acquired titles and monetized its audience. Other media owners have been cutting back partly due to the migration of advertising online.
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