FCA approves £10m acquisition of Musicmagpie by AO World
The UK’s financial watchdog has approved the acquisition of Musicmagpie by AO World for £10m.
First announced in October, the deal will see the electrical retailer acquire Musicmagpie for 9.1p per share, a fraction of its market capitalisation at IPO in 2021. It floated with a share price of 193p.
Bolton-headquartered AO sells white goods online, while Musicmagpie sells reconditioned second-hand electronics and allows people to trade in their devices, such as mobile phones.
Its share price halved in 2022 after it warned of a squeeze on its margins, and fell another 90 per cent in the following two years.
However, its share price ticked up from 5.75p to 8.66p on news of its acquisition by AO World at the start of October as the electricals firm looked to expand its consumer tech offering. Its share price is currently 8.6p.
“A top-tier trade-in service will be essential, and Musicmagpie represents a significant enabler in unlocking value through our reverse supply chain,” John Roberts, chief executive officer of AO, said last month.
“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,” Roberts added.
Musicmagpie co-founder Steve Oliver 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.”