- Combined value of disposals £1.4 billion
- £850 million to be returned to shareholders
- Ascential to focus on events only
Shares in Ascential (ASCL) were initially up 35% to 292p in morning trading as the specialist information, analytics, and ecommerce optimisation company said it was selling its digital commerce and product design business for a total of £1.4 billion to advertising group Omnicom (OMC:NYSE) and Wind UK Bidco 3 - a newly formed company established by funds advised by Apax Partners.
After the initial news shares fell back to 273p. The FTSE 250 company’s shares are up 34% year-to-date.
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The disposals will leave Ascential with its events business only and it will continue to operate as ‘an independent, UK-listed company.’
Ascential is well known for running events like Cannes Lions festival and Money 2020.
Ascential shares jump 25% as full year sales and profit top market forecasts
Duncan Painter, Ascential CEO said: ‘Omnicom’s and digital commerce’s complementary technology and data platforms, together with their strong client relationships will be instrumental in accelerating the realisation of digital commerce’s strategy, and (trend forecasting company) WGSN (Worth Global Style Network) is also well set for its next chapter of growth under new ownership.’
WGSN was bought in 2005 for £140 million.
SHAREHOLDER RETURNS
Roddy Davidson analyst at Shore Capital is approving of the sales and believes it to be of value to Ascential’s shareholders.
Davidson said in a research note: ‘On a first-pass basis we regard this as a satisfactory conclusion to the strategic plan unveiled at the start of this year -with the combined value achieved for the two businesses being sold broadly in line with our sum of the parts valuation (digital higher, WGSN lower) and clarity achieved on the shape of the world for Ascential’s shareholders going forward.’
Ascential intends to distribute approximately £850 million to shareholders – 89% of the company’s market capitalisation immediately prior to the announcement.
The company said: ‘The board expects to implement the return of value to shareholders by way of a special dividend, although the quantum, timing and form of the return of value will remain at the discretion of the board.’
The disposals are subject to shareholder approval and are expected to go through in the first quarter of 2024.
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