The Woolworths Group Ltd (ASX: WOW) share price is on watch on Friday after the company announced its intent to acquire 80% of online marketplace MyDeal.com.au Ltd (ASX: MYD).
The supermarket giant has proposed to pay $1.05 per share for the online retail store. That represents a 62.8% premium on MyDeal's last closing price of 65 cents.
As of Thursday's close, the Woolworths share price is $35.18.
Let's take a closer look at the S&P/ASX 200 Index (ASX: XJO)'s giant's proposed acquisition.
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Woolworths share price on watch amid acquisition news
The Woolworths share price could be in for a big day following news it's planning to take an 80.2% holding in MyDeal.
The online retail marketplace focuses on household goods such as furniture and homewares. It hosts around 1,900 sellers and six million products.
MyDeal brought in $260 million over the 12 months ended 31 March. Woolworths' $1.05 per share offer values MyDeal's equity at $271.8 million and its enterprise value at $242.6 million.
The ASX 200 company believes MyDeal will enhance its marketplace capabilities and complement BIG W's offerings.
Woolworths CEO Brad Banducci commented on the news that could drive the company's share price today, saying:
The addition of MyDeal to Woolworths Group represents a further step towards delivering a more holistic customer experience in food and everyday needs and materially expands our marketplace capabilities, especially in general merchandise.
If Woolworths' proposition is successful, 19.8% of MyDeal will be held by key management shareholders. CEO Sean Senvertne will hold an 18.9% stake.
The MyDeal board recommends shareholders vote in favour of the takeover as long as no better offer is tabled and an independent expert grants their tick of approval.
Senvertne currently holds 47.3% of MyDeal shares and intends to vote the stake in favour of the acquisition.
Additionally, two major MyDeal shareholders – controlling a combined 28.6% stake – have also voiced their intent to vote 'yes'.
The transaction is expected to be voted upon next quarter and MyDeal delisted thereafter.
