Interactive Investor is to buy The Share Centre in a cash and shares deal worth around £61.9m, the companies announced this morning.
The owner of The Share Centre’s stock surged as much as 17.24 per cent this morning following news of the offer.
Announcing the deal, ii said retail investment platforms need scale to sustain the levels of profit needed for significant technological investment and this gave the acquisition a strong strategic rationale.
In May last year, the companies had confirmed they were in early stage talks about a possible takeover of Share by ii, but the investment platform later decided against launching a bid.
Richard Wilson, chief executive of ii, said he was “delighted” with the deal announced today.
“Combining our individual strengths brings further scale and the opportunity to deliver enhanced value, service and customer experience to an enlarged customer base,” he added.
Under the terms of the deal, Share investors would receive 4.1p in cash and a proportion of a new share of Interactive Investor parent II for each Share share.
This price is based on a valuation of £441.62 per new II share, valuing each Share share at 41p. This represents a 41 per cent premium on Friday’s closing price.
“I am delighted to welcome this combination of our businesses, designed to transform the
prospects for individual share ownership and personal investment across the United Kingdom,” said Share executive chairman Gavin Oldham.
Oldham said the deal would help achieve Share’s major strategic ambitions to “transform” its business and to work towards “a more egalitarian form of capitalism” in the coming years.
“We have to grow significantly in order to achieve this, not only in profitability but also in scale and in substance,” he added. “With our prospective new colleagues in ii we have discovered just such a meeting of minds, and a shared purpose for the future”.