Digital 9 Infrastructure PLC (LSE:DGI9) share price jumped 9.5% in the first hour of trading on Friday following news the group is considering offloading its stake in Verne Global, the IT group.
This move comes after receiving indicative offers during a competitive process to syndicate a majority stake in Verne Globa, which was last valued at circa £517 million.
Digital 9 told investors that this proposed transaction, expected to be finalised in Q4 2023, would speed up balance sheet deleveraging and strengthen the company's financial position, thereby maximising shareholder value.
Further details on the transaction will be announced in due course.
At 8.56 am, the shares were changing hands for 39.95p, up 3.45p.
Analysts at Stifel said the proposed sale is "unsurprising" in light of the recent dividend fiasco, where the manager lost the trust of investors by reneging on recent commitments.
A full sale of Verne will wipe Digital 9's borrowings, the analysts noted, and put the company into a net cash position.
"We expect if the asset is sold in full, this will signal a process of each asset being sold individually over time. In effect, an orderly wind down of the company. Arqiva will likely represent the most difficult to sell given it is not a growth asset akin to Verne Global."