Investors seem to be becoming at least a little more hopeful that the approach by ZPG Group to the price comparison company GoCompare will have a positive outcome, with the share price gently rising and one major shareholder actively encouraging ZPG to increase its offer.
On November 15, the parties revealed that ZPG had made an indicative offer for GoCompare at 110p per share, valuing the company at around £460m. This was emphatically rejected by GoCompare’s board, which said that the offer “fundamentally undervalues the company.” While the share price rose, it initially settled at an 8% discount to the offer, suggesting that the market gave the offer little chance of quick success.
That discount has narrowed from 8% to 5% in recent days, partly encouraged by one unnamed major shareholder saying that it would react positively to an offer at around 125p per share, and agreeing that a combination of the two companies would have strategic logic, giving rise to good synergies.
The shareholder notes that the chairman Sir Peter Wood sold some of his at 100p earlier in the year, and suggest that an offer at around 125p would be fair one, which woud be likely to bring GoCompare’s bpard to the negotiating table.
ZPG has yet to respond to the suggestion, and has made no comment since confirming the approach.