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Audioboom surges as Amazon and Spotify mull takeover bids

·Business Reporter, Yahoo Finance UK
·2-min read
Audioboom rose on reports that Amazon and Spotify are mulling a potential takeover bid. Photo: Thomas Trutschel/Photothek via Getty Images
Audioboom rose on reports that Amazon and Spotify are mulling a potential takeover bid. Photo: Thomas Trutschel/Photothek via Getty

Audioboom (BOOM.L) found favour with investors on Monday after reports that Amazon (AMZN) and Spotify (SPOT) are exploring a potential takeover bid.

Over the weekend it was revealed the two tech firms may table formal bids for the London-listed podcasting group as soon as this month, with Amazon receiving advice from JP Morgan Chase and Co (JPM), Sky News said.

A person close to the situation told the broadcaster that a formal approach from the two digital giants could yet fail to materialise, and that it was unclear how public disclosure of their potential interest would affect their intentions.

Shares in Audioboom, which is backed by property tycoon Nick Candy, climbed as much as 20% after opening, its highest since listing in December 2005.

It later eased back to sit 10% higher on the day at £19.50, taking its market capitalisation to £306m ($414m) after its share price surged in the past year.

Audioboom shares have climbed over the last month. Chart: Yahoo Finance
Audioboom shares have climbed over the last month. Chart: Yahoo Finance UK

Gregory Lafitte, analyst at Tradition Securities, said the potential acquisition targeting Audioboom might be a “good match” for either Amazon or Spotify. He estimated a fair offer could be priced in the range of 1,950p to 2,100p to reflect the firm’s growth.

The potential takeovers come after a strong year for Audioboom which saw revenues jump 125% to $60.2m (£44.6m) in the year to 31 December, thanks to its shows being downloaded 116 million times every month by 32 million unique listeners globally.

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It also recorded its first annual adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of $3m, a significant milestone for the company.

Audioboom currently occupies fourth place in the rankings of US podcasters. It distributes podcasts such as No Such Thing As A Fish, the UK's Cycling Podcast, F1: Beyond the Grid, and What Makes a Killer.

Last year it rejected a bid from All Active Asset Capital, citing several drawbacks including a failure to align on an appropriate valuation.

Yahoo Finance reached out to Audioboom for comment.

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