The MyDeal.com.au Ltd (ASX: MYD) share price is launching upwards this morning after Woolworths Group Ltd (ASX: WOW) offered to buy most of the online marketplace’s shares at a 63% premium.
The supermarket giant tabled a proposal to buy 80.2% of MyDeal shares for $1.05 apiece.
The MyDeal share price closed Thursday’s session trading at 65 cents.
At the time of writing, it has surged to reach $1, representing a 55.81% gain.
Let’s take a closer look at the takeover proposition boosting the online retailer’s stock today.
Woolworths proposes MyDeal takeover
The MyDeal share price is leaping on Friday after S&P/ASX 200 Index (ASX: XJO) giant Woolworths offered to snap up most of the company’s stock for $1.05 per share.
Woolworths’ offer values MyDeal’s equity at $271.8 million and implies an enterprise value of $242.6 million.
It will also provide investors who got in on the online marketplace provider’s 2020 initial public offering (IPO) – wherein shares were offered for $1 – a 5% gain on their investment.
The MyDeal board are recommending shareholders vote in favour of the proposition. That is, unless a better offer comes along or an independent expert rules it’s not in shareholders’ best interests.
Investors representing around 76% of the company’s stock have voiced their intent to vote in favour of Woolworths’ takeover. That includes CEO Sean Senvirtne, who currently holds a 47.3% stake in MyDeal.
All the takeover goes to plan, Senvirtne will sell 60% of his holding and walk away with an 18.9% stake.
MyDeal chief product officer Kate Dockery and chief merchandising officer Dean Ramler will also retain stakes of 0.5% and 0.4% respectively.
Senvirtne commented on the news driving the MyDeal share price sky high today, saying:
[The acquisition] will help support the growth of our retail platform by accessing Woolworths Group’s capabilities across e-commerce, supply chain, retail, loyalty and more.
The companies expect shareholders to vote on the transaction next quarter with MyDeal earmarked to be delisted after its implementation.
MyDeal share price snapshot
Today’s gains have boosted the MyDeal share price back into the long-term green.
It is now trading 34% higher than it was at the start of 2022. It’s also nearly 83% higher than this time last year.
The online retailer listed at the height of the COVID-19 online shopping boom. Its highest-ever close – at $1.71 – came on the evening following its float. The stock is currently trading 41% lower than that point.
The post Here’s why the MyDeal share price is rocketing 56% today appeared first on The Motley Fool Australia.
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More reading
- Woolworths share price in focus on MyDeal acquisition proposal
- Why is the Woolworths share price sliding 7% today?
- Own Woolworths shares? The company’s about to hit a major sustainability milestone
- Why I think Coles is a better ASX dividend share than Woolworths
- Is the Telstra share price cheap compared to other ASX 200 shares?
Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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