- Retailer AO World agreed to buy the secondhand electronics seller last month
- MusicMagpie was founded in Stockport by Steve Oliver and Walter Gleeson
The Financial Conduct Authority has approved AO World’s planned £10million takeover of MusicMagpie.
White goods retailer AO World agreed to buy the secondhand electronics seller last month in a 9.1 pence per share deal under plans to broaden its mobile and customer technology offering.
It thinks the acquisition will ‘mitigate the risk of a shift’ in the consumer tech market towards repair and sustainability as the refurbished tech industry’s growth expands.
Approval: The Financial Conduct Authority has greenlighted AO World’s planned £10million takeover of MusicMagpie (Pictured left: MusicMagpie co-founder Steve Oliver)
MusicMagpie was founded in a Stockport garage in 2007 by Steve Oliver and Walter Gleeson as a used CD and DVD seller.
The company now sells everything from textbooks to laptops, smartwatches, mobile phones, and Xbox consoles and provides subscription services allowing Britons to rent electronics.
Three years ago, it was listed in London with a £200 million-plus valuation, with plans to use money from the flotation to reduce debts and expand its smartphone rental division.
However, its worth has since plunged to under £10million due to the end of Covid-related restrictions, stiff competition in the secondhand sector, and cost-of-living pressures dampening sales and profitability.
In the six months ending May, MusicMagpie’s revenue declined by 13 per cent year-on-year to £53.8million, while its losses flatlined at £2.9million.
‘Amidst an increasingly competitive environment for second-use technology, and with consumers continuing to feel the squeeze on their wallets, the market has undoubtedly been challenging,’ said chief executive Steve Oliver.
Last year, telecoms giant BT Group and Body Shop owner Aurelius entered talks to buy the firm before walking away without explanation.
While the FCA has approved AO World’s purchase of MusicMagpie, it still requires approval from the court and a majority of shareholders.
Once that happens, the takeover should be finalised during the final quarter of 2024 or in the first three months of next year.
AO World was started by John Roberts in 2000 after a friend bet him £1 in a pub that he could start a business.
The Bolton-based group enjoyed significant growth during the early stages of the pandemic when onerous trading restrictions on shops encouraged many people to obtain their fridges, washing machines and electrical appliances online.
Like MusicMagpie, it endured major struggles after lockdown curbs were loosened, but the firm rebounded to profit by cutting jobs, closing its German division, and introducing delivery charges.
AO World shares were 2.1 per cent up at 106.2p on late Wednesday morning.
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