Centaur Media PLC (LON:CAU) shares jumped higher today after the firm accelerated its transformation into a business-to-business focused group by simultaneously unveiling a major disposal and a big acquisition.
The information, insight and events group has entered into conditional agreement for the disposal of its business-to-consumer division, Home Interest to Future PLC (LON:FUTR) for an enterprise value of £32mln.
At the same time, Centaur has announced the acquisition of MarketMakers Incorporated Limited, one of the UK's leading integrated marketing services businesses for an initial consideration of £13.4mln.
The group said the net proceeds from the disposal will be used in part to provide all of the consideration for the acquisition and, as a result, completion of the former is conditional, upon completion of the latter.
Shore Capital pleased with disposal price
In a note to clients repeating a ‘buy’ rating on Centaur shares, Shore Capital analyst Roddy Davidson said: “ We are pleased with the price achieved for a good quality business which has been reinvigorated in recent years and the news that resultant EPS dilution will be significantly offset by the proposed acquisition of a fast growing, cash generative, B2B focused, enterprise which: CAU’s management has known for some time, will bring new capabilities to the group as a whole, and will significantly accelerate its on-going transition from B2C to B2B.”
Shareholders were pleased too, with Centaur shares leaping over 7%, or 3.5p o 52.0p in early morning trading.
Future shares were also strong, gaining over 6%, or 16p higher at 265p.
Shareholders give undertakings on deals
The company added that it has received irrevocable undertakings from certain shareholders to vote in favour of the transactions in respect of 49,555,987 ordinary shares, representing approximately 34.29% of Centaur's issued share capital.
It also has non-binding letters of intent to vote in favour of the transactions in respect of 21,360,630 ordinary shares, representing approximately 14.78% of Centaur's issued share capital.
Andria Vidler, Centaur’s chief executive, said: "These transactions are a major step forward in the continuing transformation of Centaur into a B2B focussed business, providing our increasingly professional customer base with a range of higher value-added products and services.”
The group also said that there has been “no significant change to the current trading and prospects” since its last update on May 9.
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