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GoCompare rumours give credence to Liberum takeover theory

Newspaper rumours this week of a takeover bid for Gocompare are plausible, analysts say
Private equity groups or property portals are viewed as potential bidders

Revived takeover rumours around Group PLC (LON:GOGO) have enabled analysts at Liberum to resuscitate their hypothesis on the stock.

After a 13% rise in the shares amid speculation that the price comparison website (PCW) group will be subject to a takeover bid, broker Liberum reiterated its ‘buy’ recommendation on the stock on Thursday but kept its price target at 100p.

READ: GoCompare takeover likely, says Liberum as it turns positive on the stock

Takeover speculation was relayed by the Daily Telegraph on Wednesday.

With shares in Gocompare earlier in the year sitting at half the level of their high from last summer, Liberum had suggested in April that there was a good chance that GoCompare would be acquired.

Analysts do not feel that price comparison rivals or CompareTheMarket are likely buyers due to regulatory concerns on competition.

“We view private equity groups as potential bidders due to interest in the information that GoCo holds as well as its WeFlip technology,” the analysts said, also suggesting that portal groups in the automotive and/or property space such as AutoTrader, eBay and CarGurus “may see a PCW service as a useful addition to their main offering”.

Liberum noted that similar strategies had been pursued by Zoopla when it bought uSwitch in 2015 and attempted to buy GoCompare in late 2017, and Scout24 in Germany when they bought in 2018.

GoCompare shares were flat at 97.5p on Thursday morning. 

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