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Why the QMS Media share price is up 21% today

The QMS Media Ltd (ASX: QMS) share price has rocketed today after QMS shares were released from the trading halt that the company was under since last Friday.

QMS shares last closed for a price of $1 per share on Friday, but when trading resumed this morning QMS shares soared, jumping 21.50% throughout morning trade to $1.22 per share at time of writing.

Why have QMS shares hit the roof?

It turns out the reason QMS requested a trading halt was an announcement that 100% of issued QMS shares are set to be acquired in a takeover by private entity Quadrant Private Equity. In an announcement to the ASX this morning, QMS confirmed it has agreed to Quadrant’s all cash offer of $1.22 per share, which the company notes is an “attractive premium’ to the average share price range that QMS has been trading in over the last three and six months.

The QMS Media board has unanimously recommended the Quadrant offer to investors, which is still subject to shareholder approval as well as the all-clear form the Australian Foreign Investment Review Board and the New Zealand Overseas Investment Office.

QMS shareholders will also be entitled to a final dividend of up to 1.3 cents per share for the year ending 31 December 2019, subject to board approval.

QMS CEO Barclay Nettlefold has this to say on the deal:

The recommended acquisition of QMS by Quadrant represents an excellent outcome for our shareholders, partners and employees. It is a testament to our sustained growth in a challenging market, and our continued market leading digital revenue contribution, led by our strong and experienced executive management team.

Where to from here?

QMS shares made their ASX debut in 2015 for an IPO price of 74 cents per share. The stock made its all-time high of $1.37 back in 2016, but the QMS share price has trended lower ever since, until today’s movements.

If shareholders give this deal the all-clear, which looks likely judging by the company’s share price movements today, it seems QMS’s time on the ASX is drawing to a close.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.