PayPoint to buy Appreciate in £83m deal, shares surge

Gifting and engagement company Appreciate Group surged on Monday after agreeing to be bought by payments firm PayPoint in an £83m deal.

PayPoint will pay 33p per share in cash plus 0.0190 new PayPoint shares. In addition, Appreciate shareholders will be entitled to receive a dividend of up to 0.8p per share in respect of the six-month period ended 30 September.

PayPoint noted that Appreciate has a well-established technology platform, more than 400,000 customers, a network of popular brand partners and significant headroom for growth across the UK consumer and corporate gifting, prepayment reward and incentivisation markets.

It also pointed out that the gift card and voucher market in the UK is a large and growing market, with an estimated value in excess of £8bn a year.

"The PayPoint board believes the corporate gifting, prepayment, reward and incentivisation market in the UK offers some attractive opportunities to enhance the PayPoint retailer proposition for its customers and to build on the existing market presence the Appreciate Group business has in providing gift card solutions to both consumers and corporates," it said.

Guy Parsons, executive chairman of Appreciate Group - formerly known as Park Group - said: "PayPoint's offer represents an attractive premium for Appreciate Group shareholders providing an opportunity to exit the majority of their shareholdings for cash, whilst participating in the potential upside of the combined Appreciate Group and PayPoint businesses over the long-term.

"We believe that all three segments of the wider Appreciate Group's business can prosper under PayPoint's ownership given PayPoint's capabilities, and that the acquisition represents a good opportunity for all our stakeholders to benefit from both the immediate cash consideration and the potential future value creation and enhanced capabilities to Appreciate Group's consumer and corporate clients arising as a result of the combination of the businesses."

At 1135 GMT, Appreciate shares were up 56% at 40.69p.