GoCompare snapped up in £600m deal: Magazine publisher Future swoops on price comparison website
Britain’s biggest magazine publisher has swooped on the price comparison website Go Compare in a £600million takeover.
Future, which owns dozens of niche print and online titles including Country Life, Games Radar and Cycling Weekly, wants to use the brand’s technology to sell more services to its 400m readers.
It is offering cash and shares in a deal that values GoCompare, which is known for its opera singer mascot Gio Compario, at £594million – or 136p per share.
Magazine publisher Future is offering cash and shares in a deal that values Go Compare – known for its opera singer mascot Gio Compario (pictured) – at £594m or 136p per share
The takeover will net Sir Peter Wood, the insurance tycoon behind the business, a package worth £170million overall, including a 6 per cent stake in Future.
It also represents another audacious gambit by Future boss Zillah Byng-Thorne, who has overseen a near-700 per cent rise in her company’s share price and scooped an £18million bonus last year.
She said the Go Compare tie-up will let the company’s titles offer a growing array of services to customers, ‘like the shop where the assistant can offer you advice on the best product, then show you where to buy it’.
For example, titles such as Games Radar already publish articles that rank laptops that are best for playing video games, with links to sellers that in turn earn Future commission fees.
And in recent years the publisher has teamed up with third parties to offer readers deals for fast broadband which they need to play games online as well.
Future now wants to bring this in-house, using Go Compare’s technology to offer readers of Real Homes, Cycling Weekly and other brands deals on home insurance, energy bills and mortgages.
Byng-Thorne, 46, added: ‘We are already helping audiences choose the best laptops for playing video games.
‘This will allow us to also say, what is the best broadband to play your games on as well?
‘It is all about trying to get the best deal for consumers while also maximising the opportunity for Future.’
Major players behind the sale
Zillah Byng-Thorne – Future
Under Zillah Byng-Thorne, magazine publisher Future has become a stock market darling.
The 46-year-old became chief executive seven years ago and has since overseen a 680 per cent rise in its share price.
She landed an £18million bonus last year, although in January, the firm faced a revolt over executive pay.
She is also on the boards of bookie Flutter, Go Co and ecommerce giant Hut Group.
Peter Wood – GoCompare
Sir Peter Wood, 74, turned insurance on its head with the launch of Direct Line in 1985.
The twice-married father of six daughters set up Esure in 1999, which launched women-only brand Sheilas’ Wheels in 2005 and bought Go Co in 2014.
He has amassed an estimated £1.2billion, with luxury homes in Britain, the US and Spain. He made £360million from his stake in Esure. His Go Compare stake is valued at £170million.
The chief executive, who formerly led Auto Trader, took over at Future in 2013 and is credited with leading a turnaround that has transformed it from a stumbling publisher to a digital trailblazer, with titles such as Tech Radar raking in fees from product sales that it funnels to the likes of Amazon.
About 23 per cent of Future’s revenues now come from ecommerce, with the figure climbing from £47.2million to £79.3million in the year to September 30.
Over the same period Future’s revenues rose from £221.5million to £339.6million and profits from £12.7million to £52million, following its takeover of rival TI Media.
Go Compare was founded in Wales in 2006. It was bought by Wood’s Esure for £95million in 2014 and spun out in 2016 with a listing of its own.
In a joint announcement which was issued yesterday, Go Compare owner, Go Co Group, and Future urged shareholders to back the takeover.
But Future’s shares fell 16.7 per cent, or 328p, to 1634p following the announcement, suggesting that investors were sour on the deal.
Go Co Group’s share price rocketed by 5.8 per cent, or 6.4p, to 116.4p yesterday.
However Russ Mould, investment director at AJ Bell, said that the tie-up looked like a ‘natural’ fit.
‘Future’s offer is one of those deals where you’re initially taken by surprise but then quickly realise there is logic in the transaction,’ he said.
‘A lot of people still associate Future as a magazine publisher yet its business model has significantly evolved beyond traditional media.
‘It has a platform to run a wide variety of websites which have a powerful way of getting people to spend money.’