Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Major GoCompare investor touts for higher offer from Zoopla-owner ZPG

Published 16/11/2017, 17:07
Updated 16/11/2017, 17:10
© Reuters.  Major GoCompare investor touts for higher offer from Zoopla-owner ZPG

© Reuters. Major GoCompare investor touts for higher offer from Zoopla-owner ZPG

By Ben Martin

LONDON (Reuters) - A top five shareholder in GoCompare said the British price comparison company should respond "positively" if a sweetened offer by Zoopla-owner ZPG were made in the region of 520 million pounds.

FTSE 250-listed ZPG (L:ZPG) made an unsolicited 110 pence-per-share proposal in stock-and-cash on Nov. 8, valuing GoCompare at 460 million pounds. GoCompare rejected the offer, saying it undervalued the business.

The GoCompare shareholder, who declined to be identified, told Reuters on Thursday that a deal with rival ZPG "will provide good synergies not available to either company on a standalone basis".

The shareholder said that an offer valuing GoCompare at about 125 pence per share should receive an encouraging reaction from the company's board. ZPG made an initial approach in May that was for an all-stock deal also worth 110 pence per share.

"The board of GoCo should react positively to a primarily paper offer in the region of 125 pence", the shareholder said, adding that this price represented "a clear premium" to the level at which GoCompare chairman Peter Wood recently sold stock and also reflected "a fair change of control valuation".

Furthermore, offering mainly shares would allow GoCompare investors to "benefit from a rising Zoopla share price post the deal closing", the shareholder added.

ZPG, which already owns price comparison businesses Money.co.uk and uSwitch as well as the Zoopla property portal, is seeking to add GoCompare, a smaller rival that focuses mainly on insurance products which was demerged from Esure last year.

ZPG's attempt to expand its price comparison operations comes as the websites have grown in popularity in Britain as consumers increasingly shop around for the best deals. Competing websites are run by Moneysupermarket.com Group and BGL, which owns Comparethemarket.com.

Last month, GoCompare chairman Wood sold 21.3m shares in the company at 100 pence apiece, although he remains its biggest investor with a stake of around 25 percent. He this week described ZPG's 110 pence proposal as "highly opportunistic".

GoCompare stock was down 1 percent at 103.5 pence at 1550 GMT in London. The company declined to comment on the shareholder's remarks.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.