The º£½ÇÊÓƵ's financial watchdog has given the green light for AO World to acquire Musicmagpie in a deal worth £10m. Initially announced in October, the transaction will see the electrical retail giant purchase Musicmagpie at 9.1p per share, a mere fraction of its market capitalisation at its IPO in 2021 when it floated with a share price of 193p.
Bolton-based AO specialises in online sales of white goods, while Musicmagpie offers reconditioned second-hand electronics and facilitates device trade-ins, such as mobile phones.
Stockport's Musicmagpie has been grappling with declining revenue as it battles to stay competitive in the challenging second-hand market. Its share price took a hit in 2022, halving after it issued a warning about margin squeezes, and plummeting a further 90 per cent over the subsequent two years, as reported by .
However, news of its acquisition by AO World in early October saw its share price rebound from 5.75p to 8.66p as the electrical firm sought to broaden its consumer tech range. The current share price stands at 8.6p.
John Roberts, CEO of AO, commented last month: "A top-tier trade-in service will be essential, and Musicmagpie represents a significant enabler in unlocking value through our reverse supply chain," He added: "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 co-founder 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."
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