Ascential PLC (LSE:ASCL) jumped over 35% higher early on Monday following an announcement that it has agreed to sell its digital commerce and product design businesses for a total of £1.4 billion.
Omnicom Group (NYSE:OMC) and Wind UK Bidco 3, a bid vehicle set up by private equity group Apax Partners, will buy the businesses respectively from Ascential, which said £850 million would be distributed to shareholders following the transaction.
"The board firmly believes that the proposed sales [...] represent excellent value for shareholders,” chairman Scott Forbes said, “including [through] the return of a significant portion of the combined proceeds."
This will be through the issue of a special dividend, Ascential said in a statement, with the proceeds due to equate to some 90% of the firm’s market cap as of Friday’s close.
“Furthermore,” Forbes continued, “these actions are compelling in that they will enable us to achieve the objectives of the strategic review, addressing the distinct investment propositions of Ascential's three businesses.”
Business to business media firm Ascential had undertaken a strategic review in January, explaining at the time a series of inter-conditional transactions would be made.
The disposals will leave Ascential with just its events business, which the firm labelled as “well positioned” for its own organic growth, following fresh finance from the deals.
These transactions will likely be completed in the first quarter of next year.
Shares jumped 35.44% to 292p on the news.