The owners of musicMagpie are in the early stages of exploring a sale of the business to both BT and Body Shop owner Aurelius Group, the company confirmed in a statement issued today.
The Stockport-HQ’d refurbished electronics seller said in the statement, which was issued in “response to speculation regarding a possible offer” that discussions between the parties are “ongoing and remain at a very early stage.”
The company’s shares were up around 20 per cent this afternoon following the news.
musicMagpie listed on the LSE two years ago with a valuation of £200m. The Financial Times reports that has currently dropped to around £20m, while Shore Capital, which is acting as musicMagpie’s nominated adviser and broker, has listed the company’s current enterprise value as £33.8m.
musicMagpie’s statement continued: “There can be no certainty that any offer for the company will be made from either of the Parties, nor as to the terms of any such offer,” and added that “shareholders are advised to take no action at this time. A further announcement will be made as appropriate.”
The company has faced a number of business challenges recently. Its legacy CD and DVD sales business has been subject to erosion as that market disappears, while last year’s postal strikes took a chunk of business at a key time of year.
HY earnings to May 31 2023 were down from £71.3m to £61.9m, although adjusted EBITDA was up 7.7% from £2.6m in 2022 to £2.8m.
Co-founder and CEO Steve Oliver told Prolific North in July: “To use a football analogy, it’s a game of two halves, we were impacted by postal disruption especially in December, and weak consumer demand.”
Oliver added that the business was “in good shape.”