BT backs out of musicMagpie takeover talks

Shares in the refurbished electronics retailer have slumped after BT and Aurelius walked away from a possible offer.

Stockport-based musicMagpie has seen its shares slump since a stock market flotation two-and-a-half years ago (PA)

MusicMagpie has seen its shares slump after telecoms giant BT pulled out of talks to take over the refurbished electronics retailer.

BT said it was not planning to make an offer for the group, just days after private equity firm Aurelius Group, which owns Footasylum and The Body Shop, also backed out of discussions.

Shares in musicMagpie tumbled around 14% in Monday afternoon trading after the news, although the firm confirmed it continues to seek possible buyers for the group.

MusicMagpie said: “There can be no certainty that any offer for the company will be made, nor as to the terms of any such offer.

“Accordingly, shareholders are advised to take no action at this time.”

MusicMagpie had seen its stock jump higher last week when it revealed “early stage” takeover discussions with BT and Aurelius.

Experts had said BT’s interest came as a surprise, but tied in with the recent push into retailing by the group’s EE arm.

Stockport-based musicMagpie has seen its shares slump since a stock market flotation two-and-a-half years ago, which valued the group at more than £200 million.

Its shares are now worth less than £20 million and the group is understood to have recently called in consultants at Deloitte to review its options, including a sale.

Trading at the group has come under pressure since the pandemic, with sales hit earlier this year by postal strikes and poor consumer confidence.

Its US business, Decluttr, has also struggled to make headway in the American market.

Half-year revenues across the group plunged 14% to £61.9 million from £71.3 million a year earlier, leaving it with widened pre-tax losses of £3.2 million in the six months to May 31 against previous half-year losses of £1 million.

The firm’s US sales tumbled from £18.4 million to £14.7 million in the first half.

The rise of streaming services have taken their toll on its traditional business buying and selling unwanted DVDs and disc media, while book sales remained in decline as expected, falling to £20.9 million from £25.3 million a year ago.

But musicMagpie said at the time of its half-year results that it was hoping for a second-half boost, given that peak trading is seen around Black Friday in November.

The group was launched in 2007 selling second-hand CDs and later expanding into DVDs, books and video games.

It now also recycles mobile phones and tech gadgets for resale.