One of the biggest movers on the local market on Thursday has been the Mitula Group Ltd (ASX: MUA) share price.
At one stage this morning the classifieds company's shares were up as much as 73% to 78 cents.
Its shares have since dropped back a touch but are still up by a sizeable 63.5% at 73.5 cents.
Why are Mitula's shares rocketing higher today?
After the market closed on Wednesday Mitula advised that it has signed a scheme implementation deed with Japan-based LIFULL Co. Ltd.
The agreement will see Mitula merge its operations with LIFULL's Trovit business in order to create a leading global online classifieds and marketplaces group.
The combined entity will be operating in 63 countries with 170 million visits per month giving customers access to more traffic and a greater range of products and services.
According to the release, LIFULL will acquire 100% of Mitula's shares through a scheme of arrangement that will see shareholders receive 0.0753 LIFULL shares for each Mitula Group share they own.
This equates to a value of 85 cents per share. Shareholders also have the option to receive a cash consideration of 80 cents per Mitula share for the first 20,000 shares they own.
What now?
While it may be disappointing for longer term shareholders that have owned the company's shares since they traded at far higher levels, overall I feel this is a good deal for Mitula shareholders.
After all, although the company's performance showed signs of improvement in the most recent quarter, I have been thoroughly underwhelmed by its overall performance over the last 18 months and believe there was no guarantee that a turnaround was on the horizon.
Shareholders that have opted to sell their shares today might want to consider reinvesting the funds into REA Group Limited (ASX: REA) or SEEK Limited (ASX: SEK) shares.
