Shares in FTSE 250 media firm Future (FUTR) have plunged over 12% to £17.25 after it announced a £594 million takeover deal for Goco (GOCO), the price comparison website-owner.

The cash and shares offer, at 136p per share or a 23.6% premium to the previous closing price, will see GoCo investors own 19% of the combined company. GoCo shares jumped 19% to 130.8p on the news.

Future said the deal, which is expected to close in the first quarter of next year, provides a ‘truly unique opportunity to capitalise on the combination of Future’s deep audience insight with GoCo’s expertise in price comparison’.


But analysts have warned Future could have a job on its hands convincing its investors that the premium for GoCo is a good deal.

The acquisition also comes hot on the heals of Future's £140 million purchase of TI Media.

GoCo directors intend to unanimously recommend the offer but AJ Bell investment director Russ Mould warned that GoCo shareholders may not want stock in the ongoing business.

Investors tend to prefer all-cash deals, giving them freedom to re-invest as they see fit, rather than be saddled with a stake in a business they may not be for them. Some may also believe that the premium is not generous enough.

‘There is a lot of excitement from Future about the deal being materially earnings enhancing and big cost synergies', said Mould.

‘However, one mustn’t forget that such claims are standard territory for acquisitions and that big deals only work if the buyer can successfully integrate the acquired business and there isn’t a clash of cultures. Buyers often underestimate these factors.

‘Thankfully Future isn’t using the word ‘transformational’ which is normally the kiss of death for acquisitions. It’s done plenty of deals in its lifetime and at face value this one looks credible.’


Alongside the takeover announcement Future published its full-year results which showed profit and revenue bolstered by a big jump in online growth.

For the year ended 30 September, revenue jumped 53% to £339.6 million, with its online audience increasing 56% to 281.8 million.

But that grow was nothing in comparison with profits, with pre-tax figures soaring 309% to £52 million year-on-year.

Future has also proposed a final dividend of 1.6p per share, and looking ahead the company said it expects the positive trends including growing digital advertising spend and eCommerce growth to continue in its new financial year.


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Issue Date: 25 Nov 2020