musicMagpie to be acquired in £10 million cash deal

Stockport-headquartered recommerce pioneer, musicMagpie, is set to be acquired by Bolton-founded online electricals retailer, AO World, in a nearly £10 million deal.

The deal, which will see shareholders receive 9.07p per share, will see AO wholly takeover musicMagpie subject to court approval, with a majority of shareholders indicating they will back the sale. The Stockport-based AIM-listed business was originally valued at 193p per share when it first floated on the stock market, but its share price had fallen to less than 6p per share at close of trading on 1st October, prior to the acquisition announcement.

The sale values musicMagpie at approximately £9,982,105. Recent financial data published by the company has seen it reduce its overheads £2.4 million and grow its UK technology sales to over £28.7 million in the first six months of 2024.

The takeover by AO, best known as an online retailer of white goods, will support the business’ growth ambitions in the refurbished technology market, currently offered through its ownership of the Mobile Phone Direct brand. The sale also comes after musicMagpie has been understood to have previously been in discussions with both BT and private equity investor, Aurelius Group, around a possible sale but no agreement was ever reached.

Non-Executive Chair of musicMagpie, Martin Hellawell commented:

“The musicMagpie Board is pleased to recommend AO’s cash offer for musicMagpie. AO’s offer is the result of musicMagpie’s extensive process to seek an acquiror for the business and represents an opportunity for shareholders to realise their holdings in full and in cash at a significant premium to the prevailing share price. The musicMagpie Board believes musicMagpie will benefit from being a part of the AO Group that has the scale and reach to support musicMagpie’s future growth and development.”

Chief Executive Officer and Co-founder of musicMagpie, Steve Oliver commented:

“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.”

Non-Executive Chair of AO, Geoff Cooper commented:

“The proposed acquisition of musicMagpie presents a strategic opportunity to integrate one of the UK’s leading mobile recommerce operators into our portfolio. With highly complementary business models, this acquisition will enable us to broaden our customer offerings while simultaneously advancing our sustainability objectives. This alignment positions us to drive growth and innovation in an increasingly environmentally-conscious market.”

Chief Executive Officer of AO, John Roberts commented:

“To achieve our strategic ambition of becoming the destination for electricals, it is crucial for AO to enhance its consumer tech offering. A top-tier trade-in service will be essential, and musicMagpie represents a significant enabler in unlocking value through our reverse supply chain. 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. musicMagpie’s commitment to customer satisfaction and its exceptional brand are closely aligned with our values, and our shared cultures create a strong foundation for collaboration. I am excited to welcome Steve and the musicMagpie team into the AO family and to realise the potential that our combined efforts can unlock.”