Publishing firm Future has agreed to buy Go Compare in a deal that values the price comparison website at almost £600m.
The media group, which owns titles including Country Life, Four Four Two and Tech Radar, said the tie-up would allow it to tap into “growing consumer demand for informed and value driven purchasing decisions”.
The mixed cash and share offer values shares in parent company GoCo Group at 136p, marking a 24 per cent premium on its closing price yesterday. This equates to a total value of £594m.
Following the takeover, GoCo shareholders will own roughly 19 per cent of the merged group.
The offer comes after a period of rapid growth for Future, which has bucked the wider downward trend in the publishing industry.
The group, which controls largely specialist titles, has successfully built its online audience as consumers turn away from print, and has looked to cash in on its readership through ecommerce deals.
Future, which has a market value of roughly £1.9bn, said its products help to drive “intent to purchase”, adding that the merger would create further opportunities to monetise content.
But the deal did not go down well with investors this morning, as shares in Future dropped more than eight per cent.
Go Compare, which is best known for its opera-laden TV adverts, lists details for rival deals in car, pet and home insurance, as well as breakdown cover.
The Newport-based firm was formerly part of insurance group Esure, but was spun off in a demerger in 2016.
Future said its chief executive Zillah Byng-Thorne, who sits on GoCo’s board, had not played a role in the takeover offer.
“On behalf of the Future board, I am delighted to present this recommended offer for Go Co Group to both sets of shareholders,” said Future chairman Richard Huntingford. “It represents a compelling mixture of complementarity and growth opportunity.
“We believe that the combination is a unique strategic opportunity to create a leading global specialist media and intent platform, capitalising on the growing consumer demand for informed and value driven purchasing decisions enabled by intent driven content, which will deliver strong returns for all shareholders.”