Bolton-based electrical retailer AO World plc has agreed to buy Stockport second-hand media seller musicMagpie for about £10 million in cash.
“With complementary business models focused online and on customer service, AO believes the acquisition will augment its capability and value capture in the mobile and consumer technology categories,” AO said in a statement.
Each shareholder of musicMagpie, which refurbishes and sells second-hand phones, CDs and books, will get 9.07p in cash per share, valuing the whole company about £9.98 million, representing a premium of about 58% over the closing price on Tuesday.
The directors of musicMagpie intend to recommend unanimously that shareholders vote for the deal. AO said investors holding more than half of the company’s shares have backed the deal already.
AO plans to complete the transaction through a court-sanctioned scheme of arrangement under Part 26 of the Companies, and said it expects it to complete during the first quarter of 2025.
Geoff Cooper, Non-Executive Chair of AO, said: “The proposed acquisition of musicMagpie presents a strategic opportunity to integrate one of the UK’s leading mobile recommerce operators into our portfolio. With highly complementary business models, this acquisition will enable us to broaden our customer offerings while simultaneously advancing our sustainability objectives. This alignment positions us to drive growth and innovation in an increasingly environmentally-conscious market.”
Chief Executive Officer of AO, John Roberts, said: “To achieve our strategic ambition of becoming the destination for electricals, it is crucial for AO to enhance its consumer tech offering. A top-tier trade-in service will be essential, and musicMagpie represents a significant enabler in unlocking value through our reverse supply chain. Moreover, musicMagpie stands to leverage our existing supply channels, which could lower its cost of acquisition and allow us to scale refurbished technology with operational precision.”
Non-Executive Chair of musicMagpie, Martin Hellawell, said: “The musicMagpie Board is pleased to recommend AO’s cash offer for musicMagpie. AO’s offer is the result of musicMagpie’s extensive process to seek an acquiror for the business and represents an opportunity for shareholders to realise their holdings in full and in cash at a significant premium to the prevailing share price. The musicMagpie Board believes musicMagpie will benefit from being a part of the AO Group that has the scale and reach to support musicMagpie’s future growth and development.”
Steve Oliver, Chief Executive Officer and Co-founder of musicMagpie, said: “AO is a highly trusted consumer brand that shares our commitment to providing a first-rate service for customers. I am very proud of the musicMagpie business and the trusted brand that we have created, providing consumers with a smart, sustainable and trusted way to buy, rent and sell refurbished consumer technology and physical media products. We welcome the opportunity to join the AO Group and believe it represents a natural custodian for musicMagpie as part of the next stage of the business’ development.”