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PayPoint PLC on Monday said it is buying Liverpool-based prepaid gift card and voucher provider Appreciate Group PLC.
The deal values AIM-listed Appreciate at around £83 million, said PayPoint, which is a Hertfordshire, England-based payment services provider. PayPoint will pay 33 pence in cash and 0.019 of a new PayPoint share for each Appreciate share.
Appreciate shareholders also still will receive a 0.8p interim dividend that now has been declared by Appreciate for the six months that ended September 30.
PayPoint said the deal was worth 44p per Appreciate shares, a 69% premium to Appreciate's Friday closing price of 26.05p. PayPoint shares had closed at 580p on Friday.
On Monday morning, Appreciate shares jumped 58% to 41.20p each on Monday morning in London, while PayPoint shares slipped 4.8% to 552.00 pence each in London.
At completion, PayPoint shareholders will own 95% of the enlarged firm, and Appreciate investors the remaining 5%.
"Whilst the Appreciate Group directors are now confident that Appreciate Group is better positioned for renewed success and that the Appreciate Group has good prospects as an independent AIM-quoted entity, they also recognise that there are significant macroeconomic headwinds which represent a greater financial risk to a small business. In addition, smaller companies are increasingly constrained by fundamental issues of share liquidity and limited research coverage," PayPoint said.
Paypoint said the deal will deliver attractive returns and "broaden the universe that PayPoint serves and strengthens the client and retailer proposition". The company expects the takeover scheme to become effective in the first half of 2023.
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