(Alliance News) - Media firm Future PLC on Wednesday unveiled a GBP594 million takeover of price comparison site GoCo Group PLC.
GoCo - which owns Gocompare.com, Look After My Bills and MyVoucherCodes - saw its shares leap 14% to 125.00 pence in London on Wednesday morning. Future shares were down 8.2% in early trade at 1,802.00p each.
Under the agreed combination, GoCo shareholders will be entitled to receive 0.052497 new shares in magazine publisher Future and 33 pence in cash, valuing each GoCo share at 136p each. This represents a premium of 24% to Tuesday's closing price, when GoCo shares closed at 110p.
GoCo shareholders will own around 19% of the combined group.
GoCo directors intend to recommend that shareholders vote in favour of the deal, as do Future's directors. Future expects the transition to be "immediately" earnings per share accretive.
"We believe that the combination is a unique strategic opportunity to create a leading global specialist media and intent platform, capitalising on the growing consumer demand for informed and value driven purchasing decisions enabled by intent driven content, which will deliver strong returns for all shareholders," said Future Chair Richard Huntingford.
Separately on Wednesday, Future published its full-year results.
In the year to September 30, the firm's pretax profit jumped to GBP52.0 million from GBP12.7 million the year before.
Revenue surged 53% to GBP339.6 million from GBP221.5 million. Media revenue grew to GBP237.3 million from GBP154.9 million, while Magazine revenue jumped to GBP102.3 million from GBP66.6 million.
Future said the revenue growth was driven by a combination of organic growth and acquisitions, underpinned by a 56% rise in total online users.
Chief Executive Zillah Byng-Thorne said: "Our exceptional results, which are ahead of expectations, demonstrate the continued strength of our strategy, as well as the innovation, fortitude and agility of our business, focused on its purpose, delivered by its people.
"Our content now reaches one in three adults in the UK and US, and our leadership positions are underpinned by a track record of strong, consistent organic growth, and accelerated through acquisitions. The long-term fundamentals of growing global digital advertising spend and eCommerce growth add to our confidence that, despite continued market uncertainty, we remain well-positioned to continue our strong growth."
Future recommended a final dividend of 1.6p.
The firm said the new financial year has "started well".
"Our online audience continues to show strong growth, which was underpinned by our recently successful Amazon Prime Day in October," it added.
By Paul McGowan; paulmcgowan@alliancenews.com
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