Stop the press: British online retailer AO to acquire musicMagpie for £10 million

Strategic acquisition to enhance mobile and consumer tech business

The acquisition of musicMagpie, a Stockport-based retailer specializing in refurbished electronics and second-hand media, will bolster AO World’s offering in mobile re-commerce and consumer tech. By adding musicMagpie’s expertise in buying and selling refurbished smartphones, laptops, and gaming consoles to its portfolio, AO World can broaden its customer base and increase value capture in this growing segment.

Non-Executive Chair of AO World, Geoff Cooper, commented on the acquisition:  "The proposed acquisition of musicMagpie presents a strategic opportunity to integrate one of the UK’s leading mobile re-commerce operators into our portfolio. With highly complementary business models, this acquisition will enable us to broaden our customer offerings while simultaneously advancing our sustainability objectives. This alignment positions us to drive growth and innovation in an increasingly environmentally-conscious market."

Boosting sustainability efforts with re-commerce integration

The deal is expected to prepare AO World for the shift in the consumer technology market towards sustainability and repair, as demand for refurbished tech continues to rise. The focus on sustainability is a core part of AO World’s strategy, and integrating musicMagpie’s re-commerce operations will help it capitalize on these growing trends.

MusicMagpie shareholders are set to receive 9.07 pence per share in cash, representing a 58% premium to the stock’s closing price on Tuesday. MusicMagpie shares surged by 51% following the announcement, trading at 8.68 pence per share, while AO World’s stock also saw a modest increase of 2.9%, trading at 112.80 pence.

A unified growth strategy for both companies

The acquisition has been endorsed by musicMagpie's directors, who hold a 12.3% stake, and has secured support from 54% of total shareholders. MusicMagpie Chair, Martin Hellawell, emphasized the strategic benefit of joining forces with AO World:  "AO’s offer is the result of musicMagpie’s extensive process to seek an acquirer for the business and represents an opportunity for shareholders to realize their holdings in full and in cash at a significant premium to the prevailing share price. The musicMagpie board believes musicMagpie will benefit from being a part of the AO Group that has the scale and reach to support musicMagpie’s future growth and development."*

This acquisition follows unsuccessful attempts by telecoms group BT and investment firm Aerilius Group to acquire musicMagpie last year. With AO World’s strong market presence and complementary business model, musicMagpie is now poised for a new phase of growth under its new parent company.

AO World expects the acquisition to become effective in the first quarter of 2025, marking a significant step forward in its strategy to capture more of the growing refurbished technology market.