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magazineAscential shares surge 30% on £1.4 billion divestments to focus on events
The market is reacting extremely positively to news of events outfit and information provider Ascential’s (ASCL) sale of its digital commerce and product design businesses for a combined £1.4 billion.
The digital commerce unit is being offloaded to Omnicom (OMC:NYSE) for £741 million and WGSN – its product design arm – to Apax Partners for £700 million. Group CEO Duncan Painter is leaving to join Omnicom as part of the agreement.
The deal will see a return of £850 million to shareholders, potentially through a special dividend. More significantly for the long-term direction of the business, these transactions mean the company is more focused on its leading events like Cannes Lions festival and Money 20/20 – a regular fintech conference in Las Vegas.
Shore Capital analyst Roddy Davidson says: ‘On a first-pass basis we regard this as a satisfactory conclusion to the strategic plan unveiled at the start of this year. We have consistently flagged a significant disparity between Ascential’s stock valuation and that of its underlying businesses.’
The sale is subject to shareholder approval, if approved the deal will go through in the first quarter of 2024.
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