Woolworths share price in focus on MyDeal acquisition proposal

Woolworths has its sights on this ASX-listed online marketplace.

| More on:
a man surrounded by huge piles of paper looks through a magnifying glass at his computer screen.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Woolworths has proposed to acquire a majority hold in ASX-listed retail marketplace MyDeal.com.au
  • The supermarket giant has offered MyDeal shareholders $1.05 per share for an 80.2% stake – a near-63% premium on its previous close
  • The MyDeal board is recommending shareholders vote in favour of the acquisition as entities with a combined 75.9% stake voice their support

The Woolworths Group Ltd (ASX: WOW) share price is on watch on Friday after the company announced its intent to acquire 80% of online marketplace MyDeal.com.au Ltd (ASX: MYD).

The supermarket giant has proposed to pay $1.05 per share for the online retail store. That represents a 62.8% premium on MyDeal’s last closing price of 65 cents.

As of Thursday’s close, the Woolworths share price is $35.18.

Let’s take a closer look at the S&P/ASX 200 Index (ASX: XJO)’s giant’s proposed acquisition.

Woolworths share price on watch amid acquisition news

The Woolworths share price could be in for a big day following news it’s planning to take an 80.2% holding in MyDeal.

The online retail marketplace focuses on household goods such as furniture and homewares. It hosts around 1,900 sellers and six million products.

MyDeal brought in $260 million over the 12 months ended 31 March. Woolworths’ $1.05 per share offer values MyDeal’s equity at $271.8 million and its enterprise value at $242.6 million.

The ASX 200 company believes MyDeal will enhance its marketplace capabilities and complement BIG W’s offerings.  

Woolworths CEO Brad Banducci commented on the news that could drive the company’s share price today, saying:

The addition of MyDeal to Woolworths Group represents a further step towards delivering a more holistic customer experience in food and everyday needs and materially expands our marketplace capabilities, especially in general merchandise.

If Woolworths’ proposition is successful, 19.8% of MyDeal will be held by key management shareholders. CEO Sean Senvertne will hold an 18.9% stake.

The MyDeal board recommends shareholders vote in favour of the takeover as long as no better offer is tabled and an independent expert grants their tick of approval.

Senvertne currently holds 47.3% of MyDeal shares and intends to vote the stake in favour of the acquisition.

Additionally, two major MyDeal shareholders ­– controlling a combined 28.6% stake ­– have also voiced their intent to vote ‘yes’.

The transaction is expected to be voted upon next quarter and MyDeal delisted thereafter.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Mergers & Acquisitions

A person with a round-mouthed expression clutches a device screen and looks shocked and surprised.
Consumer Staples & Discretionary Shares

iSelect share price explodes 75% on takeover news

The iSelect share price is sky high after the company revealed a takeover offer from the owner of www.comparethemarket.com.au.

Read more »

Two men in business attire play chess.
Resources Shares

OZ Minerals ‘completely in play’: Broker on BHP takeover bid

BHP's bid for OZ Minerals may not be over...

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Mergers & Acquisitions

Macquarie share price slips despite rumours $3.7 billion acquisition imminent

French company Veolia is divesting itself of the assets to resolve antitrust concerns raised in May by UK regulators.

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Mergers & Acquisitions

The OZ Minerals share price is rocketing 35% after BHP bid

Despite knocking back a takeover bid, OZ Minerals shares are going nuts.

Read more »

An investor looks happy holding a finger to his computer screen while holding a coffee cup in a home office scenario.
Mergers & Acquisitions

BHP share price lifts as $8.3b takeover bid rejected

The iron ore giant proposed to snap up its ASX 200 copper-focused peer for $25 per share.

Read more »

A man stands with his arms crossed in an X shape.
Mergers & Acquisitions

OZ Minerals share price on watch after miner rejects BHP’s $25 per share takeover offer

OZ Minerals has rejected BHP's takeover offer...

Read more »

asx share price on watch represented by ship captain looking through binoculars
Mergers & Acquisitions

Acquisitions ahoy: Soul Pattinson share price in focus

Financial services is the latest area of potential deals for Soul Pattinson.

Read more »

an engineer in hard hat stands amid solar panels, part of a solar farm, as she holds a tablet in her hand and smiles.
Mergers & Acquisitions

Genex share price climbs 6% amid new takeover rumours

There's speculation another group may launch a bid for the renewable energy company.

Read more »