MusicMagpie in early stage of takeover talks with BT and private equity firm
MusicMagpie said discussions with BT and Aurelius were at a “very early stage”.
The takeover talks come after musicMagpie saw its shares slump since a stock market flotation two-and-a-half years ago, which valued the group at more than £200m.
Its shares are now worth less than £20m, with the stock trading at 18.75p at market close on Friday, and the group understood to have recently called in consultants at Deloitte to review its options, including a sale.
BT and Aurelius now have until December 18 to make a firm offer or walk away.
News of the talks follow less than a week after Aurelius agreed a cut-price deal to buy cosmetics retailer The Body Shop from Brazil’s Natura & Co for up to £207m.
Stockport-based musicMagpie has seen shares come under pressure since the pandemic, with trading hit earlier this year by postal strikes and poor consumer confidence.
Its US business, Decluttr, has also struggled to make headway in the American market.
Revenues across the group plunged 14 per cent to £61.9m from £71.3m a year earlier, leaving widened pre-tax losses of £3.2m in the six months to May 31 against previous half-year losses of £1m.
The firm’s US sales tumbled from £18.4m to £14.7m in the first half.
The rise of streaming services have taken their toll on its traditional business buying and selling unwanted DVDs and disc media, while book sales remained in decline as expected, falling to £20.9 million from £25.3m a year ago.
But musicMagpie said it was hoping for a second-half boost, given that peak trading is seen around Black Friday in November.
The group was launched in 2007 selling second-hand CDs and later expanding into DVDs, books and video games.
It now also recycles mobile phones and tech gadgets for resale.
Over the summer, musicMagpie, announced the expansion of its SMARTDrop Kiosk network, starting with sites in Manchester Arndale, Cribbs Causeway and Willow Brook, which are both in Bristol.
In a statement issued in August, musicMagpie revealed that it had completed an initial rollout of 290 SMARTDrop Kiosks into Asda stores across the UK in 2022. The latest shopping centre kiosks, along with The Trafford Centre kiosk in Manchester, which was launched earlier this year, provided greater access to a wider range of customers, musicMagpie said.